Investors cannot take joint action over alleged online trading fraud

A COMBINED action by 35 investors who claim they were defrauded in an alleged multimillion euro electronic-trading scam cannot continue, the High Court has ruled.

Mr Justice Brian O’Moore will rule at a later date on whether to strike out or stay the action involving investments with the liquidated Irish-registered firm, Greymountain Management Ltd, after he found each investor’s action must be brought as separate claims under court rules.

The 35 investors sued Greymountain, its Dublin-based directors, Ryan Coates and Liam Grainger, and alleged shadow directors, brothers Jonathan and David Cortu who are based in Israel.

The investors claim they believed they were investing in a complex trade known as “binary options” when in fact, they say, the software system their trades were conducted on was rigged to ensure they lost their money.

The investors, from the US, Canada, Singapore, UAE and the UK, claim they were induced by the defendants to open binary accounts with false claims they would earn significant profits.

The claims are denied.

The case was admitted to the Commercial Court last year despite objections from the four personal defendants that the 35 claims had been opportunistically “shoe-horned” into one to bring them over the €1m threshold for entry of a case to the fast-track commercial list.

The four personal defendants then asked the court to strike out or stay the case on grounds it did not comply with a court rule requiring that claims must arise from the same transaction or series of transactions and must involve a common question of law and fact.

The investors opposed the application saying all the transactions had identical features and characteristics.

The money invested was paid to Greymountain and then paid to third parties, it was argued.

Yesterday, Mr Justice O’Moore, found the proceedings did not fall within the terms of the court rule relating to “same” transactions.

Taking three random cases from the 35, he said the basic fact of the claims made by these three was that they arose from entirely discrete transactions, he said.

The judge will hear later from the parties on the form of the order he should make.