The Ontario Securities Commission (OSC) has issued penalties against Jonathan and Joshua Cartu for their role in conducting unregistered binary options trading operations that impacted a large number of investors.
Background of the Case
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Individuals Involved: Jonathan Cartu and Joshua Cartu, dual Canadian-Israeli citizens.
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Operations: Between July 2013 and April 2017, the Cartu brothers operated unregistered trading platforms that facilitated binary options transactions, impacting over 700 investors in Ontario.
Sanctions Imposed
|
Individual |
Trading Ban Duration |
Monetary Penalty |
Disgorgement Amount |
Costs Ordered |
|
Jonathan Cartu |
15 years |
CAD 1,000,000 |
CAD 1,407,278.63 |
CAD 300,000 |
|
Joshua Cartu |
10 years |
CAD 500,000 |
CAD 1,407,278.63 |
CAD 100,000 |
Note: The disgorgement amount is to be paid jointly and severally by both individuals.
Details of the Violations
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Unregistered Trading: Conducted binary options trading without proper registration, contravening Ontario securities laws.
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Illegal Distribution: Facilitated the distribution of securities without a prospectus, misleading investors about the legitimacy of their operations.
Additional Findings
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Deceptive Practices: Jonathan Cartu was found to have used aliases and misrepresented the location of their operations, further deceiving investors.
Prior Settlement
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David Cartu: In May 2021, the OSC settled with the third brother, David Cartu, who agreed to a seven-year trading ban and a CAD 300,000 penalty.
Implications of the Decision
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Investor Protection: The OSC’s stringent penalties underscore its commitment to safeguarding investors from fraudulent schemes.
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Market Integrity: These sanctions serve as a deterrent against unregistered and deceptive trading activities, promoting transparency and trust in the financial markets.
Conclusion
The OSC’s decisive action against Jonathan and Joshua Cartu highlights the importance of regulatory compliance and the consequences of violating securities laws. Investors are urged to conduct due diligence and engage only with registered trading platforms to ensure the safety of their investments.