Troubled tech group iSignthis is facing more potential regulatory headaches after it emerged US and Israeli authorities are pursuing legal action against the masterminds behind three of its customers over an alleged $150 million fraud.
iSignthis is not involved in the legal action, but the court cases and the decision by the Australian courts to appoint liquidators to iSignthis customers AGM Markets, OT Markets and Ozifin has killed off a key stream of revenue for the Australian-listed group.
iSignthis has been plagued with its own regulatory issues over whether it has been properly meeting its disclosure standards. Its shares were suspended from trade on October 2.
According to court documents filed in the US, American regulators are investigating the alleged masterminds behind three contracts for difference (CFD) providers who used the controversial Australian tech platform.
Court documents relating to the Australian Securities and Investments Commission’s (ASIC) attempt to wind up these so-called contracts for difference and foreign exchange traders over alleged unconscionable conduct revealed strong Israeli connections.
ASIC alleges that AGM Markets was controlled by Israelis Yossef Herzog and Yakov Cohen and said they were associated with binary options trader Yukom Communications.
Mr Herzog and Mr Cohen were named in August as defendants to civil action taken by the US Commodity Futures Trading Commission (CFTC), which charged five entities and four individuals with fraud relating to a global retail binary options enterprise. CFTC alleges the fraud is $US103 million ($150 million).
Read the article by Colin Kruger and Sarah Danckert in The Sydney Morning Herald.