Federal authorities announced Monday they have filed a civil complaint against a Glen Cove man who they said bilked up to $4 million from investors through a website designed to allow customers to speculate on the price of a stock.
The Securities and Exchange Commission seeks a penalty and an injunction against Mark Suleymanov, 38, as well as repayment of the funds officials said he extracted from investors, many of whom were senior citizens who were unfamiliar with investment practices, officials said.
Suleymanov’s attorney could not be reached for comment.
Federal authorities from the SEC, who were also unavailable for comment, had stated in a complaint filed on Monday that from 2012 to 2016, Suleymanov ran a website, SpotFN, that allowed clients to invest in "binary options," which can yield returns based on whether a security will close at or above a specific price on a given trading day. He also ran similar sites called BinaryFN.com and OptionsMogul.com.
But it was a bogus scheme, officials said, adding that the company’s offer and sales of binary option securities were never registered with the SEC, nor did Suleymanov apply for an exemption to that requirement.
“Suleymanov caused SpotFN’s website to falsely represent that SpotFN was a legitimate incorporated entity with officers and directors, when in fact, for most of its existence, it was not,” according to the complaint filed by SEC attorneys.
Officials said Suleymanov “used software to manipulate trading results to increase investor losses,” which the company then kept, and prevented investors from accessing the funds in their accounts.
Suleymanov also used investors’ money to run the business that was scamming them, SEC officials said.
“The SpotFN website also falsely stated that an investor's funds would be held in a separate account and used only for trading options, not for SpotFN's business expenses,” the SEC said in a news release. “In fact, Suleymanov commingled investor funds in his bank accounts and misused certain of the funds for business and personal expenses.”
Officials said that Suleymanov has already agreed to a settlement that is subject to court approval. It was unclear when a judge would decide on that agreement.
The U.S. Attorney's office for the Eastern District of New York said Suleymanov was arrested in July in connection with this alleged scheme and was released on $500,000 bond, but has not been indicted.