Court will hear case of investors claiming €4m fraud

Thirty-five investors who claim they were defrauded and lost more than €4m in an electronic-trading scam have had their case against an Irish-registered firm and four businessmen admitted to the Commercial Court.

The court heard the 35 among a potential 111 investors are suing Greymountain Management Ltd, in liquidation, its Dublin-based directors, Ryan Coates and Liam Grainger, and alleged shadow directors, brothers Jonathan and David Cortu, who are based in Israel.

Mr Justice Robert Haughton admitted the case to the High Court’s fast-track commercial list on the application of Marcus Dowling BL, for the 35 investors. Rossa Fanning, for the four personal defendants, said his clients vigorously deny the claims and his side regarded these proceedings as opportunistic.

They opposed entry of the case to the commercial list on grounds including that 35 claims for different amounts and for different investments have been “shoehorned” into one claim in order to come within the €1m threshold for admission to the court.

Mr Justice Haughton said he would admit the matter to the Commercial Court even though it involved different amounts and investments. It seemed to be common case that the money was paid through Greymountain, he said. He gave directions for exchange of papers in the case which comes back before the court in October.

Mr Fanning said there may be an application from his clients on a later date for a security of costs order against the 35 plaintiffs as none of them live in this jurisdiction.

In their action, the investors claim they believed they were investing in a complex trade known as ‘binary options’ when, in fact, the software system their trades were conducted on was rigged to ensure they lost their money.

Also known as “all or nothing options”, binary options are a product where the investor gets either a payoff of some fixed monetary amount if successful, or nothing at all.

The outcome of the investment depends entirely on the outcome of a yes/no proposition, which itself depends on the price of a particular asset rising above or falling below a specified amount at a specified date and time.