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Screenshot of a breaking news alert e-mail from Q2 2017
Cyprus financial regulator CySEC has issued a series of Board Decisions, indicating that it is fining the former owners and management of now defunct Binary Options brokerage group Pegase Capital Ltd a total of €200,000.
Pegase operated the Interactive Option binary brand.
The majority of the fine, €150,000, was issued to former shareholder and CEO of Interactive Option Michel Teman. Mr. Teman is also prohibit from exercising professional activity related to the financial sector for a period of five years, to June 2022.
Fined €25,000 each were former senior managers and executive directors Pantelis Ioakim and Giorgos Miltiadous. CySEC also noted in its decision non-executive directors Alexandra Aspri and Stavros Petrakides, although neither Mrs. Aspri nor Mr. Petrakides were issued fines.
Pegase itself was issued one of the largest fines ever handed down to an online broker by CySEC (€300,000) in late 2015 for a variety of violations. At the time, Pegase was operating Interactive Option, as well as online brokers HelloBrokers and MTX Plus. A few months later, in March 2016, Pegase’s CIF license was suspended by CySEC with the regulator citing that the company violated sections of its regulation concerning persons who effectively direct the business of a CIF, CIF shareholders, organisational requirements, conduct of business obligations when providing investment services to clients, and professional competence of Investment Firms and the natural persons employed by them.
Pegase eventually decided to renounce its CIF license and shut down its operating brands.
In its current decision handed down against Mr. Teman and the other named management team members and directors, CySEC noted that it was fining Mr. Teman the maximum possible fine given the serious violations the regulator noted around the (improper) management of Pegase and its brands. CySEC stated that Mr. Teman’s failure to periodically evaluate the effectiveness of policies, regulations and procedures that the company had adopted contributed directly to the suspension of Pegase’s operating license.
The full Board Decision issued by CySEC reads as follows:
19 October 2017
CYSEC Board Decision
Board decision date: 06.02.2017
Regarding: Mr. Michel Pierre Salomon Teman, Mr. Pantelis Ioakim, Mr. Giorgos Miltiadous, Mrs Alexandra Aspri, Mr. Stavros Petrakides (Directors of Pegase Capital Ltd)
Legislation: Directive DI144-2007-01 of 2012
Subject: Violation/Administrative sanctions
The Board of the Cyprus Securities and Exchange Commission (‘CySEC’) would like to inform the public that, at its meeting held on 6 February 2017, it reached the decision that Mr. Michel Pierre Salomon Teman, Mr. Pantelis Ioakim, Mr. Giorgos Miltiadous, Mrs Alexandra Aspri and Mr. Stavros Petrakides have not complied with paragraph 9(1) of CySEC Directive DI144-2007-01 of 2012 for the Authorisation and Operating Conditions of CIFs (‘the Directive’) since, as directors of Pegase Capital Ltd (‘the Company’), they did not periodically assess the effectiveness of the policies, arrangements and procedures implemented by the Company for complying with obligations provided in the Investment Services and Activities and Regulated Markets Law of 2007, as in force (‘the Law’), and in Directive DI144-2007-02 of 2012 (see CySEC’s Decision dated 27.11.2015).
For the above non-compliance with paragraph 9(1) of the Directive, CySEC reached the following decisions:
1. To impose of an administrative fine of:
1.1. €150,000 on Mr. Michel Pierre Salomon Teman, executive director and shareholder with a qualifying holding in the Company during the relevant period;
1.2. €25,000 on Mr. Pantelis Ioakim, executive director of the Company until 17 March 2016;
1.3. €25,000 on Mr. Giorgos Miltiadous, executive director of the Company until 17 March 2016.
2. Not to impose an administrative fine on Mrs Alexandra Aspri and Mr. Stavros Petrakides, non-executive directors of the Company until 19 February 2016.
Pursuant to section 127(2)(d) of the Law, CySEC decided to prohibit Mr. Michel Pierre Salomon Teman from exercising professional activity related to the financial sector for a period of five (5) years, to June 2022.
Full details/justification of the CySEC’s decision are/is available in the Greek text of the announcement.