International law firm Giambrone Law and London-based financial litigation boutique firm Healys LLP have teamed up to prepare two class action lawsuits against a duo of binary options brokerages, LBinary and NRGbinary, who have allegedly defrauded nearly 70 investors from their deposits, in excess of €4.3 million. The majority of claimants are from Saudi Arabia and Kuwait, with some European clients from Germany and Italy joining the class action.
Two separate cases will be filed before the High Court of Justice in London. The English jurisdiction has been selected due to the role played by Moneynetint Ltd, a London based payments company, authorised by the Financial Conduct Authority, which served as a vehicle for these brokerages to receive funds from its investors. There is currently no evidence that Moneynetint is involved with the alleged frauds.
the majority of claimants are from Saudi Arabia and Kuwait
According to the investigations conducted by Giambrone Law, both LBinary and NRG Binary share a similar ownership structure with both defendants domiciled in the UK.
The claimants are alleging that the same individuals are behind the ownership of several other binary brokerages which are operating a group of companies from Israel. The lawsuit comes at a time when Israeli authorities are heavily clamping down on the industry, giving companies connected with binary options trading 30 days to cease their operations.
In addition to NRGbinary and LBinary, Giambrone Law is also in the process of preparing similar class actions against IronFX, Titan Trade and Ivory Options.
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The claimants are aiming to obtain a money judgment which would lead to an insolvency declaration of the brokerages and the appointment of trustees in bankruptcy. If successful, banks which are holding the funds of the companies will be asked to freeze the defendants’ accounts.
total claims from both lawsuits may well reach up to €10 million
Commenting to Finance Magnates on the litigation prospects, Gabriele Giambrone stated that the total claims from both lawsuits may well reach up to €10 million.
“We are aiming to find out to what extent the banks are expected to enforce their due diligence procedures on binary options and forex companies and whether the banks can be made liable to indemnify the victims of fraudulent binary options and forex brokers,” Giambrone explained to Finance Magnates.
In what could be an important legal precedent, the case is aiming to establish a principle that can be wide reaching irrespective of the jurisdiction where the funds have been deposited from.
NRG BINARY operated a binary options trading platform on the nrgbinary.com website and was cleared and operated by MHGG Tech Solutions Limited of 47 Park Royal Road, London MHGG Tech Solutions Ltd is a Private Limited Company, incorporated in England and registered in the English Companies House. It was registered on 2 July 2014 and its director was Anous Kostikian, a Greek citizen, born in September 1992 and resident of Cyprus.
Recently NRG Binary has been struck off from the company register in the UK. LBinary is not stating the jurisdiction from which the website operator is running its binary options business. Finance Magnates reporters have attempted to contact the brokerages for the purposes of this article, but at the time of publication no official response has been received.