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Banc De Binary Ltd, Oren Shabat Laurent

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Banc De Binary Ltd, Oren Shabat Laurent Case 2:13-cv-00993-RCJ-VCF Document 58 Filed 03/11114 Page 1 of 19 1 JOHN W. BERRY (N.Y. Bar No. 2972610) (pro hac vice admission pending) Email: [email protected] 2 AMY JANE LONGO (Cal. Bar No. 198304) (admitted pro hac vice) Email: [email protected] 3 LESLIE A. HAKALA (Cal. Bar. No. 199414) (pro hac vice admission pending) 4 Email: [email protected] 5 Attorneys for Plaintiff Securities and Exchange Commission 6 Michele Wein Layne, Regional Director 7 Lorraine Echavruria, Associate Regional D irector John W. Berry, Regional Trial Counsel 8 5670 Wilshire Boulevru·d, 11th Floor Los Angeles, California 90036 9 Telephone: (323) 965-3998 Facsimile: (323) 965-3908 10 11 12 UNITED STATES DISTRICT COURT 13 DISTRICT OF NEVADA 14 15 SECURITIES AND EXCHANGE Case No.: 2:13-cv-00993-RCJ-VCF COMMISSION, 16 SECOND AMENDED COMPLAINT 17 Plaintiff, 18 vs. 19 BANC DE BINARY LTD, OREN SHABAT 20 LAURENT (f/k/a OREN SHABAT), ET BINARY OPTIONS LTD., BO SYSTEMS 21 LTD. SEYCHELLES and BDB SERVICES LTD. SEYCHELLES, 22 Defendants. 23 24 PlaintiffSecurities and Exchange Commission ("SEC") alleges as follows: 25 JURISDICTION AND VENUE 26 1. This Court has jurisdiction over this action pursuant to Sections 20(b) , 20(d)(l ), 27 and 22(a) ofthe Securities Act of 1933 (the "Securities Act"), 15 U.S.C. §§ 77t(b), 77t(d)(l ), & 28 1 Case 2:13-cv-00993-RCJ -VCF Document 58 Filed 03/11/14 Page 2of 19 1 77v(a), and Sections 2l(d)(l), 2l(d)(3)(A), 2l (e), and 27 ofthe Securities Exchange Act of 1934 2 (the "Exchange Act"), 15 U.S.C. §§ 78u(d)(l), 78u(d)(3)(A), 78u(e), & 78aa. Defendants have, 3 directly or indirectly, made use ofthe means or instrnmentalities of interstate commerce, ofthe 4 mails, or ofthe facilities of a national securities exchange, in connection with the transactions, 5 acts, practices, and courses ofbusiness alleged in this complaint. 6 2. Venue is proper in this district pursuant to Section 22(a) ofthe Securities Act, 15 7 U.S.C. § 77v(a), and Section 27 of the Exchange Act, 15 U.S.C. § 78aa, because certain ofthe 8 transactions, acts, practices, and courses of conduct constituting violations of the federal 9 securities laws occmTed within this district. 10 SUMMARY 11 3. This matter involves the unregistered offer and sale of securities by Defendants, 12 who operate an online bina1y options trading platf01m. 13 4. Defendants Banc de Binaiy Ltd ("BdB Ltd"), ET Binaiy Options Ltd. ("ETBO"), 14 BO Systems Ltd. Seychelles ("BO Systems") and BDB Services Ltd. Seychelles ("BDB 15 Services") do business as "Banc de Binaiy," and ai·e all affiliates of each other. 16 5. Defendant Oren Shabat Laurent ("Laurent") is the CEO ofBdB Ltd. He is, or 17 was at all relevant times, the only shareholder or one of a few shai·eholders of each ofBdB Ltd, 18 ETBO, BO Systems and BDB Se1vices. 19 6. Through one or more ofthe "Banc de Bina1y" websites, including 20 www.bbinaiy.com, Defendants, directly or indirectly, offered and sold "binaiy options" to U.S. 21 customers. 22 7. "Bina1y options" provide a payout contingent upon the price movement of an 23 underlying asset, including stock and stock indices. The binaiy options offered by Defendants 24 are securities under the federal securities laws. 25 8. Defendants offered and sold these securities to U.S. investors in unregistered 26 transactions through general solicitations by its representatives over the internet and through 27 phone calls and spam emails. 28 2 Case 2:13-cv-00993-RCJ -VCF Document 58 Filed 03/11/14 Page 3of 19 1 9. As the CEO, president, executive director or co-owner ofthe corporate 2 Defendants, Lament has directly and indirectly offered and sold these secmities to U.S. 3 investors. He is, or at all relevant times was, also a control person ofeach ofthe corporate 4 Defendants. By engaging in this conduct, Defendants have violated, and continue to violate, 5 Sections 5(a) and 5(c) ofthe Securities Act. 6 10. Moreover, by trading these bimuy options on account ofU.S. investors, each of 7 BdB Ltd, ETBO, BO Systems and BDB Services has acted as a broker-dealer. However, none of 8 them are registered with the SEC as a broker-dealer, and thus each has violated Section 15(a)(l) 9 ofthe Exchange Act, 15 U.S.C. § 78o(a)(l). As a control person ofeach ofthese corporate l 0 Defendants, Lament is also liable for these violations. 11 11. The SEC seeks preliminaiy and pe1manent injunctions against all Defendants, as 12 well as an accounting, disgorgement with prejudgment interest and civil penalties. 13 THE DEFENDANTS 14 12. Defendant BdB Ltd is incorporated in the Republic ofCypms and regulated by 15 the Cypms Securities and Exchange Commission ("CySEC"). Based on its registration with 16 CySEC, BdB Ltd has obtained reciprocal licenses in several other countries in the European 17 Union, including Ge1many, Spain and the United Kingdom, but not in the United States. 18 13. Defendant ETBO is incorporated in Israel. 19 14. Defendant BO Systems is incorporated in the Republic ofSeychelles. 20 15. Defendant BDB Se1vices is incorporated in the Republic ofSeychelles. 21 16. Defendant Laurent, fo1merly known as Oren Shabat, age 29, resides in Israel. He 22 has dual citizenship in both the United States and Israel. 23 17. Laurent is the founder, president, chief executive officer and executive director of 24 BdB Ltd. 25 18. Laurent is a 50% shareholder ofBdB Ltd. The other 50% shai·eholder is 26 Laurent's father. 27 19. From 2010 to 2012, Laurent was the sole shai·eholder ofETBO. 28 20. Laurent is the sole shareholder ofBO Systems. 3 Case 2:13-cv-00993-RCJ -VCF Document 58 Filed 03/11/14 Page 4of 19 1 21. In 2013, Laurent was a 50% shai·eholder ofBDB Se1vices. The other 50% 2 shareholder was Lament's father. 3 22. BdB Ltd has done business as "Banc de Binruy" or has othe1wise operated under 4 the brand name "Banc de Binruy." 5 23. ETBO has done business as "Banc de Binruy" or has otherwise operated under the 6 brand name "Banc de Binruy." 7 24. BO Systems has done business as "Banc de Binruy" or has otherwise operated 8 under the brand name "Banc de Binruy." 9 25. BDB Services has done business as "Banc de Binruy" or has othe1wise operated IO under the brand name "Banc de Binruy." II 26. From at least 2010 until at least Januruy 2013, the Banc de Binruy business has 12 maintained a virtual office on Wall Street in New York City. That address was listed on one or 13 more ofthe Banc de Binruy websites and in emails from purpo1ted Banc de Binruy 14 representatives to Banc de Binruy customers in the United States. 15 THE ALLEGATIONS 16 A. The Defendants and Their "Banc de Binary" Business 17 27. Lament founded BdB Ltd, and is BdB Ltd's CEO, president, executive director 18 and one ofits two co-equal shareholders. 19 28. Since its founding, BdB Ltd has operated an online trading platf01m that allows 20 investors to buy what BdB Ltd calls "binaiy options." 21 29. BdB Ltd's primaiy business is offering and selling these binruy options, and 22 operating this online trading platf01m. 23 30. ETBO, BO Systems and BDB Se1vices are each affiliates ofBdB Ltd. 24 31. Lament oversees the Banc de Binruy business. At all relevant times, he was or is 25 the 50% shru·eholder ofBdB Ltd and BDB Se1vices, and was or is the sole shareholder ofETBO 26 and BO Systems. 27 32. As the CEO ofBdB Ltd, Laurent oversees all ofthe company's deprutments, 28 including the departments of"Investment Advice," "Finance and Accounting," "Mru·keting" and 4 Case 2:13-cv-00993-RCJ -VCF Document 58 Filed 03/11/14 Page 5of 19 1 "Administration." He is the signat01y on BdB Ltd's bank accounts. Laurent is also actively and 2 highly involved in the management ofthe Banc de Binaiy business. He also holds himself out as 3 the person primai·ily responsible for Banc de Binaiy's business activities, both commercially and 4 to regulators and auditors. 5 B. The Defendants' Binary Options 6 3 3. In general, a "binaiy option" is a security whose payout is contingent on the 7 future value ofan underlying asset Banc de Binary's binaiy options ai·e over-the-counter, cash- 8 settled option contracts. A binaiy option is "binaiy" because there are only two possible 9 outcomes-upon expiration, its holder will receive either a pre-detennined ainount ofmoney or 10 nothing at all, depending on whether the underlying asset increases or decreases in value. 11 34. For exainple, ifthe cmTent price of the stock of a hypothetical company "XYZ, 12 Inc." were $80 per shai·e, an investor could go to the Banc de Binaiy online trading platfo1m and 13 buy a binaiy option that will pay some ainount ifXYZ's stock price goes above $80 per share at 14 some fixed point in the future. If, at expiration ofthe option, the stock price ofXYZ is greater 15 than $80 per shai·e, then the binaiy option holder receives the payout. On the other hand, if 16 XYZ's stock price is less than $80, then the holder receives nothing. 17 35. One of the Banc de Binaiy online trading websites is www.bbinaiy.com. On that 18 website, investors can buy binaiy options whose payouts are contingent on the value ofa vai·iety 19 of underlying assets.
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