SEC v. Peter Szatmari, No. 1:19-cv-12028, District of Massachusetts (Sept. 30, 2019) — Complaint

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS

SECURITIES AND EXCHANGE
COMMISSION,

Plaintiff,

                v.

PETER SZATMARI

Defendant.

Case No.

COMPLAINT

 Plaintiff Securities and Exchange Commission (the “Commission” or “SEC”) alleges:
SUMMARY OF THE ACTION
1. This complaint concerns a U.S.-based Internet marketer  who  fraudulently
offered and sold securities called “binary options” by disseminating f alse and misleading
advertising through electronic mail, infomercial-like online videos, and websites to millions of
prospective investors in the United States and globally.
2. From at least January 2014 through December 2016 (the “Relevant Period”),
Peter Szatmari (“Szatmari” or “Defendant”) and his marketing p artner (“Partner”),
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 created
and/or disseminated false and misleading Internet-based promotional materials designed to drive
viewers of binary options brokers’ websites and induce them to open and fund binary option
trading accounts.  The brokers, in turn, paid Szatmari and Partner each time a referred visitor
opened and funded an account.  The brokers were not registered with the SEC, and they offered

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   The Commission today filed separately a n action against Mr. Szatmari’s marketing partner,
David Sechovicz.  Mr. Sechovicz and the SEC have agreed, however, to immediately resolve
that action and therefore the claims against Mr. Sechovicz.

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and sold unregistered binary options referencing securities and securities indices to investors in
the United States.
3. Szatmari and Partner worked as “affiliate marketers.”  Affiliate marketing is a
form of performance-based marketing where an independent advertiser promotes a third party’s
goods or services, usually by driving potential customers to the third party’s website.  Affiliate
marketers may distribute their own self-created/original advertising materials (“Original
Campaigns”) or distribute advertising materials created by others, a practice known as
remarketing (“Remarketed Campaigns” and together with Original Campaigns, “Campaigns”).
Under both scenarios, the affiliate marketer receives a commission each time a person visiting
the third-party website takes a specified action, like clicking a link, making a purchase, or in this
case, opening and funding a binary option trading account.
4. Szatmari and Partner sent or paid others to send millions of emails that directed
prospective investors to videos created by them or other affiliate marketers that touted free
software trading programs supposedly capable of generating large profits for investors who
opened binary option trading accounts with specific “recommended” brokers.  At other times,
Szatmari and Partner paid third-  party websites to host advertorials – advertisements stylized as
news articles – that made similar claims.
5. The videos created and/or disseminated by Szatmari and Partner purported to
show actual investors and real results, including people enjoying rich lifestyles supposedly
achieved by trading binary options.  The videos also contained purported “live” demonstrations
of people opening and funding accounts in “real time” and seeing their trading balances increase
automatically.  The participants in the videos insisted to viewers that their stories were true.

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6. Yet these videos were entirely fictional.  Paid actors pretended to be the creators
of software that could effortlessly generate millions of dollars trading binary options; individuals
gave fake testimonials falsely claiming they made great wealth using the software; and fabricated
photos showed fictional account statements reflecting large balances supposedly achieved using
the software.  The videos’ “live” demonstrations of profitable trading were also shams.
7. In addition, the videos included misleading claims that the software only worked
with a specific and “recommended broker.”     In reality, no software existed capable of producing
the promised results, and Szatmari’s marketing materials only “recommended” those brokers
who agreed to pay Szatmari and Partner each time an investor opened and funded an account.
8. Szatmari and Partner received a flat commission – customarily between $350 and
$450 – for every customer who viewed their Original Campaign materials and then opened and
funded an account with the campaign’s recommended broker.    Typically, Szatmari and Partner
split this commissions 50/50.
9. By virtue of this conduct and other conduct described in this Complaint,
Defendant violated the antifraud provisions of Section 17(a) of the Securities Act of 1933 (the
“Securities Act”), 15 U.S.C. § 77q(a), and Section 10(b) of the Exchange Act of 1934 (the
“Exchange Act”), 15 U.S.C. § 78j(b), and Rule 10b-5 thereunder, 17 C.F.R. 240.10b-5.
10. Defendant was also a necessary factor and substantial participant in an illegal
offering or sale of unregistered securities and also violated the registration provisions of Section
5 of the Securities Act, 15 U.S.C. § 77e.
11. The Commission seeks civil monetary penalties and remedial ancillary relief,
including, but not limited to, disgorgement of ill-gotten gains, injunctions, and such other relief

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as the Court may deem necessary and appropriate.  Unless restrained and enjoined by this Court,
Defendant is  likely to continue to engage in the acts and practices alleged herein.
JURISDICTION AND VENUE
12. The Commission brings this action pursuant to Sections 20(b), 20(d)(1) and 22(a)
of the Securities Act, 15 U.S.C. §§ 77t(b), 77t(d)(1) & 77v(a), and Sections 21(d)(1),
21(d)(3)(A), 21(e) and 27(a) of the Exchange Act, 15 U.S.C. §§ 78u(d)(1), 78u(d)(3)(A), 78u(e)
& 78aa(a).  Defendant has, directly or indirectly, made use of the means or instruments of
transportation or communication in interstate commerce or of the mails in connection with the
activities alleged in this Complaint, including by making use of the Internet to offer securities
and sending or receiving interstate email and participating in interstate voice or video calls.
13. Venue is proper here pursuant to Section 22(a) of the Securities Act and Section
27(a) of the Exchange Act and also pursuant to 28 U.S.C. § 1391(c)(3).  During the Relevant
Period, Partner lived in this district and carried on the unlawful affiliate marketing activities of
Defendant and Partner from this district.  Acts, practices, and transactions constituting violations
of law alleged in this Complaint occurred within this district.  Defendant is also no longer a
resident of the United States, and therefore venue is proper in any district court.
DEFENDANT
14. Peter Szatmari, age 43, lived and worked in Hawaii and Hungary at various
times during much of the Relevant Period.  He later lived in Austin, Texas until approximately
May 2019, at which point he moved to Budapest, Hungary.
FACTS
I. AFFILIATE MARKETING IN BINARY OPTIONS SECURITIES
15. Binary options are financial instruments with a value tied to the price of a
reference asset, including securities and securities indices.  An investor chooses whether the

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underlying asset’s price will rise above or fall below a certain price at a particular time (e.g., will
Apple, Inc. stock be above $100 per share at 1 p.m. on a particular day).  The options are
“binary” because they have only two possible outcomes: the investor with a correct prediction
makes money; the investor with an incorrect prediction loses the investment.  Unlike other types
of options, a binary option does not give the holder the right to purchase or sell the underlying
asset.  Instead, it is “cash settled.”
16. Binary options referencing a security or securities within the meaning of Section
2(a)(1) of the Exchange Act, 15 U.S.C. § 77b(a)(1), and Section 3(a)(10) of the Exchange Act,
15 U.S.C. § 78c(a)(10), are themselves “securities” within the meaning of those provisions.
17. Affiliate marketers typically promote over the Internet a product or service
provided by a third party (e.g., a vendor) who pays them when they cause someone to take a
specific action, like clicking a link or buying the vendor’s product or service.  Here, binary
options brokers paid Szatmari and Partner a pre-set commission (typically $350 to $450) for each
investor who opened and funded a n account with those brokers as a result of viewing fraudulent
marketing materials that Szatmari and Partner created and/or disseminated.
II. DEFENDANT’S FRAUDULENT OFFERS OR SALES OF BINARY OPTIONS
18. Between 2014 and 2016, Szatmari participated in the creation and dissemination
of at least six false and misleading marketing campaigns designed to persuade potential
investors, predominately in the United States, to open and fund binary options trading accounts
with overseas unregistered brokers operating on the Internet.  These Original Campaigns’
advertising materials generally consisted of (a) textual materials disseminated over the Internet;
(b) a website; and (c) one or more videos embedded into the website.

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19. The six binary options affiliate marketing campaigns that Szatmari  helped create
and disseminate during this period (i.e., the Original Campaigns) consisted of campaigns going
by the following names:
Campaign Name Year
Wall Street Millionaire 2014
Automated Money Kit 2014
Click Click Money 2014
The Cash Code / Robert Allen System 2015
Guaranteed Wealth 2015
The Conservative Investor 2016

20. Szatmari’s role in creating and distributing the Original Campaigns included
identifying, soliciting, and/or negotiating with binary options brokers about commissions and
other matters; creating false and misleading solicitations; obtaining, rebranding, and distributing
automated trading software; performing accounting functions; and arranging for the bulk
dissemination of solicitations, including through social media.  One method of dissemination
involved paying media companies to distribute advertisements to their subscribers by email or as
“sponsored content”, a practice known as media buying.  Partner’s work included monitoring the
customer service email addresses associated with the campaigns and responding to investor
emails; developing content and design for internet websites that supported the campaigns;
registering campaign websites; and arranging for the bulk dissemination of solicitations.
21. The materials Szatmari helped create and disseminate typically contained false
and misleading statements touting a free and easy way to make money using a secret software
system.  These written materials were designed to entice potential investors into clicking a link
that would take them to the Original Campaigns’ websites that falsely described the secret
software system and its potential to make users rich.

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22. For example, an electronic mail message disseminated in connection with the
Wall Street Millionaire binary options campaign read: “I’ve been cashing in an additional $9500
weekly income ever since I started using this amazing FREE software.  Download your FREE
copy here before they start selling it.”  Embedded in the email – typically where it read “here” –
was a hyperlink that directed readers to the campaign website.
23. Similarly, an email sent in connection with the campaign called Cash Code
contained the following language: “ Imagine the size of your bank balance going from $0 to
$135,000 in the next few months.  Now imagine you did it with totally automated software.
Software you can set up in 7 minutes or less . . . I’ve never seen anything like this. >>Read the
shocking details and proof here<<”.
24. Investors who clicked the hyperlink in the written materials were taken to the
Original Campaign websites that featured the false and misleading videos.  Generally, the videos
included the following types of misstatements: (1) false guarantees that the trading software
would automatically generate significant profits for customers after they opened and funded
accounts with a broker; (2) actors pretending to be real users, creators, or owners of the trading
software; (3) fictitious depictions of customer bank and trading statements reflecting large
balances or profits; (4) fictitious testimonials where actors claimed to have profited using the
fake software; (5) fake “live” software demonstrations; and (6) false representations that the
brokers to which the materials referred investors were actually “recommended” for reasons other
than their payment to Defendant and his Partner.
25. For example, the videos contained the following falsities:
a. The Wall Street Millionaire videos told a contrived story about a person
named Stanley who developed a purported system for trading binary options that

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supposedly enabled him to generate $1.54 million in a year, or an average of $4,500 each
day.  In reality,  “Stanley” was a paid actor who never developed any software nor
profited trading binary options.
b. Click Click Money featured videos that included a fictional spokesperson,
Seth Warburton, who displayed fake bank account statements reflecting nearly $800,000
he supposedly earned in just months using the software.  The actor portraying Warburton
falsely claimed the software “can generate between $523 and $4,098 of pure profit per
day . . . for even the hopeless newbie,” and can pick winning trades at least 92% of the
time.
c. The Cash Code included a video that falsely stated that the corresponding
software “has made more millionaires in the past 6 months than any other website on
earth.”   Further, the video: (1) showed several fake bank account balances in the millions
that supposedly resulted from use of Cash Code; (2) showed the supposed real-time
growth of an account from $250 to hundreds of thousands of dollars in just minutes; (3)
claimed the system has “100% accuracy;” and (4) stated that “All of our clients are
financially independent within 60 days of using this system . . .on average – by that they
require no job or any other source of income to sustain themselves from that point on.”
d. The Guaranteed Wealth videos featured “Victor Lambert,” who
supposedly discovered a system that picked winning binary options trades with over 90
percent accuracy.  Lambert claimed he made “over $2.8 million in profits” over the past
two years.  The video displayed fake account statements to show purported winning
trades and purported real-time updates showing an account balance increasing from $250

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to more than $23,000 in a matter of days.  The video includes a series of false
testimonials in which purported users of the software told of their five-digit returns.
26. The videos also falsely stated that the brokers linked on the Original Campaign
websites were chosen because they were trustworthy or their systems contained a glitch that
could be exploited by the software to make money.  In reality, Szatmari and his Partner chose the
brokers only because those brokers had agreed to pay them a referral fee for each investor.
27. Defendant knew or was reckless in not knowing that the Original Campaign
marketing materials he helped create and disseminate were materially false and misleading.
28. Defendant knew the stories portrayed in their videos were untrue and that the
persons depicted were actors, not who they claimed to be in the videos.  For example:
a. In an August 2015 email exchange with Partner looking to choose a name
for the Conservative Investor’s main character, Defendant wrote: “we did not come up
with a name – how about using David Blaze?  or News Max lol . . . but yeah, on David
Blaze ;-)”.  Partner responded, “lol I dunno if I want to run David Blaze’s name through
the mud.  People will start writing the ‘David blaze’ is a scam.”
b. In other emails, Defendant discusses, among other things, selecting actors,
testimonials, and scripts, and creating fake screen shots for the Original Campaigns.
29. Szatmari knew the statements about the software touted in the Original Campaign
materials was untrue.   In various emails, he discussed ways to appease customers who called to
complain about not having received the software depicted in the campaign videos.
a. In one January 2014 email, Szatmari belittled “lazy and greedy” customers
who foolishly believed that the touted software could provide winning trades.  He then

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considered how to respond to more wary customers – but still without offering them any
actual software.  Szatmari wrote in his email:
Currently we get people excited about a software and then don't give them
anything and tell them it's included with their broker. The part about ‘it's working
seamlessly in the background’ may not be enough for some or many people as you
pointed out. So let's take a step back and look at what this software represents. It's the
traders [sic] imaginary secret friend giving him the tips on what to trade and actually
doing it. The trader does not want to think about what trades to make - he wants
something else to make that decision for him. This something - as we told him - will
pick the winning trades for him (and potentially even make it for them)[.]  Essentially
we're talking about lazy and greedy person who expects and believes that some magic
push button software will make lots of money for them - without having to make a
decision AND act on the decision... We certainly get plenty of people who are not
bothered by the fact that there is no software -they're either curious/excited to give it a
try anyways and soon forget the whole software thing or actually believe that it runs
in the background - even though they're making the trades. So for those that don't
‘drink the cool aid’ is there something we can do to get them comfortable with the
whole thing - by basically offering them what they look for in the software in another
form? I think we're in general agreement that we don't want to offer the software.
b. In a related January 2014 email, Szatmari wrote: “Any way we can get our
hands on some silly software that we can send these guys to if they really ask? I'm
guessing all these ‘gurus’ are using the same shit software just branded as their own.”
c. And in a December 2013 email concerning how to reply to investors who
asked why they had not received the software described in the videos, Szatmari wrote, “I
think one way to appease these ‘smarter’ customers in the future is to provide ‘signals’ or
work with brokers that do - so it looks like they're getting some help...”
30. In February 2014, Szatmari nevertheless procured trading software from another
affiliate marketer to give to investors persistent about the software.  In an email, he wrote “I like
the idea of rebranding the software for us as Wall Street Millionaire (it’s probably a quick fix).
Then we continue promoting the same way and provide the software to those that ask for it /
complain they're not getting it.”  Defendant and Partner later rebranded this same software in
connection with several other campaigns.

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31. Szatmari also knew that the binary options brokers made money from investor
deposits, as opposed to winning trades, i.e., that the brokers’ interests were not aligned with
investors,  and that investors were unlikely to profit by trading binary options.  For example:
a. In a May 2014 email, a broker told Szatmari that it made money from
“customer’s losses.”
b. In January 2015, Szatmari received an email from his Partner stating,
“Interesting that some customers keep signing up to brokers despite being ripped off =)”.
c. In February 2015, Szatmari wrote: “If [broker] gets more traffic than they
can handle, his people can’t turn enough of the depositors into profitable traders.  For
example: this week the average deposit (based on current balance) was around $300, last
week it was $350.  He pays us $400, so they probably need to get a few hundred more
dollars per trader on average to break even on our payout and then pay everyone,
overhead, spotoption, processing, etc. and a profit.”
d. In June 2016, Szatmari wrote to his Partner concerning the brokers:
“Something Yoni [a broker] mentioned has struck me.  Namely that their customers just
want a friend, someone to talk to, to act like their psychiatrist.  And their customers are
basically ‘paying’ for that – with all their trading losses ...”
e. Defendant also received numerous emails from investors complaining that
they had lost money after watching one of the Original Campaign’s videos and signing up
with a “recommended broker.”
32. Szatmari also knew that his and the brokers’ activities violated U.S. laws.
a. In November 2014, Szatmari wrote to a broker: “You’ve probably already
heard.  Supposedly (cannot verify independently lol) [Broker A] got a letter from the

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CFTC to stop accepting US traders so they will be moving them to another brand.  I
assume it’s what some of the others also do – get enough complaints, launch a new brand
. . . .”  He also wrote: “To me is seems that basically they comply with the CFTC request
and quietly move everything over to another brand . . . and the whole cycle starts over
again.”
b. In a May 2016 email, Szatmari admitted concern about the Federal Trade
Commission (FTC) and implicitly admitted that he knew his Original Campaigns were
false and misleading.  After reviewing sample advertisements used for “health offers” on
one of the websites used to promote binary options, he wrote: “wtf . . . cure Alzheimer’s
in 90 days? cure diabetes in 3 days? and we are worried about the ftc lol?”.
c. In numerous emails, Szatmari admitted his understanding that binary
options brokers violated U.S . law and engaged in fraudulent practices.  In one email to a
broker that owed him money, Szatmari wrote:  “I will also provide them [investors] with
instructions to contact the United States Commodity Futures Trading Commission and
the United States Securities and Exchange Commission to alert them to the fraudulent
business practices of the company and its owners as well as for operating a financial
services firm without proper license in the United States.”
d. Similarly, in August 2016, Defendant complained that it was getting more
difficult to promote binary options in part due to “pressure from the Man in the US.”
33. Defendant caused false and misleading materials related to the Original
Campaigns to be sent to millions of potential investors.  The Original Campaigns’ false and
misleading websites and videos were viewed by more than 350,000 persons and caused more

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than 25,000 investors to make deposits for trading binary options with one of approximately 35
unregistered brokers.
34. These unregistered brokers offered and sold binary options referencing securities
over the Internet to investors in the United States.  For example the table below reflects the
securities and securities indices offered and sold by three brokers, representing approximately
two-thirds of the referrals Defendant helped make over the relevant period.
Broker Number Investors
Referred
Securities Offered Securities Indices
Offered
Broker 1
5377 19 (e.g., Microsoft, Apple,
Coca Cola, Nike).
20 (e.g., DJIA,
NASDAQ, S&P,
FTSE, Hang Seng)
Broker 2
8822 20 (e.g., Apple, Facebook,
IBM, Exxon).
8 (e.g., DJIA,
NASDAQ, S&P)
Broker 3
3532 28 (e.g., Apple, Nike, Tesla,
Netflix).
5 (e.g., DJIA,
NASDAQ, S&P)
35. Defendant and Partner realized approximately $3.8 million in profits from these
six campaigns between 2014 and 2016.
36. Szatmari and Partner also disseminated false and misleading binary marketing
campaigns create by other affiliate marketers (i.e. the Remarketed Campaigns).  In such
circumstances, the broker paid the creator of the materials the commission and the creator paid
Defendant and Partner a sizeable cut of that commission.  Defendant knew or was reckless in not
knowing that the Remarketed Campaigns were false and misleading.  For example in the email
previously cited above, Defendant wrote: “Any way we can get our hands on some silly software
that we can send these guys to if they really ask? I'm guessing all these ‘gurus’ [i.e. other affiliate
marketers] are using the same shit software just branded as their own.”  Szatmari and Partner
realized approximately $1.66 million in additional profits through remarketing.

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VIOLATIONS OF THE FEDERAL SECURITIES LAWS
FIRST CLAIM FOR RELIEF
Fraud in the Offer or Sale of Securities
Violations of Section 17(a) of the Securities Act

37. Paragraphs 1 -36 are realleged and incorporated by reference herein.
38. Defendant, by engaging in the conduct described above, directly or indirectly, in
the offer or sale of securities by the use of means or instruments of transportation or
communication in interstate commerce or by use of the mails:
(a)  with scienter, employed devices, schemes, or artifices to defraud;
(b)  obtained money or property by means of untrue statements of a material fact
or by omitting to state a material fact necessary in order to make the statements made, in
light of the circumstances under which they were made, not misleading; and/or
(c)  engaged in transactions, practices, or courses of business which operated or
would operate as a fraud or deceit upon the purchaser.
39. By reason of the foregoing, Defendant violated, and unless enjoined will again
violate, Section 17(a) of the Securities Act, 15 U.S.C. § 77q(a).
SECOND CLAIM FOR RELIEF
Fraud in Connection with the Purchase or Sale of Securities
Violations of Section 10(b) of the Exchange Act and Rule 10b-5

40. Paragraphs 1 -36 are realleged and incorporated by reference herein.
41. Defendant, by engaging in the conduct described above, directly or indirectly, in
connection with the purchase or sale of a security, by the use of means or instrumentalities or
interstate commerce, of the mails, or of the facilities of a national securities exchange, with
scienter:
(a)  employed devices, schemes, or artifices to defraud;

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(b)  made untrue statements of a material fact or omitted to state a material fact
necessary in order to make the statements made, in the light of the circumstances under
which they were made, not misleading; and/or
(c)  engaged in acts, practices or courses of business which operated or would
operate as a fraud or deceit upon other persons.
42. By reason of the foregoing, Defendant violated, and unless enjoined will again
violate, Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5 thereunder, 17
C.F.R. § 240.10b-5.
THIRD CLAIM FOR RELIEF
Unregistered Offer or Sale of Securities
Violations of Section 5 of the Securities Act

43. Paragraphs 1-36 are realleged and incorporated by reference herein.
44. No registration statement had been filed or was in effect for any of the security-
based binary options offered or sold through the Defendant’s Original Campaigns.
45. Defendant, by engaging in the conduct described above, directly or indirectly,
made use of means or instruments of transportation or communication in interstate commerce or
of the mails to offer to sell or to sell such securities.
46. By reason of the foregoing, Defendant violated, and unless enjoined will again
violate, Section 5 of the Securities Act, 15 U.S.C. §§ 77e.
RELIEF REQUESTED
WHEREFORE, the Commission respectfully requests that this Court:
a) Find that Defendant committed the alleged violations;
b) Order Defendant to disgorge, with prejudgment interest, all ill-gotten gains he
received or derived from the activities set forth in this Complaint, and to repatriate any ill-

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gotten funds or assets he caused to be sent overseas;
c) Order Defendant to pay civil penalties under Section 20(d) of the Securities
Act, 15 U.S.C. § 77t(d), and Section 21(d)(3) of the Exchange Act, 15 U.S.C. § 78u(d)(3);
d) Order Defendant prohibited from, directly or indirectly, including through any
entity he owns or control, participating in the marketing, offer or sale of securities over the
Internet or by email or other forms of electronic communication;
e) Permanently enjoin Defendant from directly or indirectly violating Sections 5
and 17(a) of the Securities Act, 15 U.S.C. §§ 77e & 77q(a), and Sections 10(b) of the
Exchange Act, 15 U.S.C. §§ 78j(b), and Rule 10b-5 thereunder, 17 C.F.R. § 240.10b-5;
f) Retain jurisdiction over this action in order to implement and carry out the
terms of all orders and decrees that it may enter, or to entertain any suitable application or
motion for additional relief within the jurisdiction of this Court; and
g) Grant such other and further relief as may be necessary or appropriate.

Dated:  September 26, 2019

Respectfully submitted,

/s/ Kenneth W. Donnelly
Kenneth W. Donnelly (DC # 462996)
Trial Counsel for Plaintiff
Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549-5949
Tel. (202) 551-4946
Fax (202) 772-9282
Email: [email protected]
Of Counsel:
Jennifer A. Leete
Jason M. Anthony

   Michael S. Fuchs

UNITED STATES DISTRICT COURT 
DISTRICT OF MASSACHUSETTS 

 
 
SECURITIES AND EXCHANGE 
COMMISSION, 
 

Plaintiff, 
 
                v. 
 
PETER SZATMARI  
   

Defendant. 
 

  
 
 
Case No.  
 
 

 
COMPLAINT 

 Plaintiff Securities and Exchange Commission (the “Commission” or “SEC”) alleges:     

SUMMARY OF THE ACTION 

1. This complaint concerns a U.S.-based Internet marketer  who  fraudulently 

offered and sold securities called “binary options” by disseminating false and misleading 

advertising through electronic mail, infomercial-like online videos, and websites to millions of 

prospective investors in the United States and globally.    

2. From at least January 2014 through December 2016 (the “Relevant Period”), 

Peter Szatmari (“Szatmari” or “Defendant”) and his marketing partner (“Partner”),1 created 

and/or disseminated false and misleading Internet-based promotional materials designed to drive 

viewers of binary options brokers’ websites and induce them to open and fund binary option 

trading accounts.  The brokers, in turn, paid Szatmari and Partner each time a referred visitor 

opened and funded an account.  The brokers were not registered with the SEC, and they offered 

                                                 
1   The Commission today filed separately an action against Mr. Szatmari’s marketing partner, 
David Sechovicz.  Mr. Sechovicz and the SEC have agreed, however, to immediately resolve 
that action and therefore the claims against Mr. Sechovicz. 

Case 1:19-cv-12028-DPW   Document 1   Filed 09/27/19   Page 1 of 16



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and sold unregistered binary options referencing securities and securities indices to investors in 

the United States.   

3. Szatmari and Partner worked as “affiliate marketers.”  Affiliate marketing is a 

form of performance-based marketing where an independent advertiser promotes a third party’s 

goods or services, usually by driving potential customers to the third party’s website.  Affiliate 

marketers may distribute their own self-created/original advertising materials (“Original 

Campaigns”) or distribute advertising materials created by others, a practice known as 

remarketing (“Remarketed Campaigns” and together with Original Campaigns, “Campaigns”).  

Under both scenarios, the affiliate marketer receives a commission each time a person visiting 

the third-party website takes a specified action, like clicking a link, making a purchase, or in this 

case, opening and funding a binary option trading account.   

4. Szatmari and Partner sent or paid others to send millions of emails that directed 

prospective investors to videos created by them or other affiliate marketers that touted free 

software trading programs supposedly capable of generating large profits for investors who 

opened binary option trading accounts with specific “recommended” brokers.  At other times, 

Szatmari and Partner paid third-party websites to host advertorials – advertisements stylized as 

news articles – that made similar claims.    

5. The videos created and/or disseminated by Szatmari and Partner purported to 

show actual investors and real results, including people enjoying rich lifestyles supposedly 

achieved by trading binary options.  The videos also contained purported “live” demonstrations 

of people opening and funding accounts in “real time” and seeing their trading balances increase 

automatically.  The participants in the videos insisted to viewers that their stories were true. 

Case 1:19-cv-12028-DPW   Document 1   Filed 09/27/19   Page 2 of 16



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6. Yet these videos were entirely fictional.  Paid actors pretended to be the creators 

of software that could effortlessly generate millions of dollars trading binary options; individuals 

gave fake testimonials falsely claiming they made great wealth using the software; and fabricated 

photos showed fictional account statements reflecting large balances supposedly achieved using 

the software.  The videos’ “live” demonstrations of profitable trading were also shams. 

7. In addition, the videos included misleading claims that the software only worked 

with a specific and “recommended broker.”  In reality, no software existed capable of producing 

the promised results, and Szatmari’s marketing materials only “recommended” those brokers 

who agreed to pay Szatmari and Partner each time an investor opened and funded an account.    

8. Szatmari and Partner received a flat commission – customarily between $350 and 

$450 – for every customer who viewed their Original Campaign materials and then opened and 

funded an account with the campaign’s recommended broker.  Typically, Szatmari and Partner 

split this commissions 50/50. 

9. By virtue of this conduct and other conduct described in this Complaint, 

Defendant violated the antifraud provisions of Section 17(a) of the Securities Act of 1933 (the 

“Securities Act”), 15 U.S.C. § 77q(a), and Section 10(b) of the Exchange Act of 1934 (the 

“Exchange Act”), 15 U.S.C. § 78j(b), and Rule 10b-5 thereunder, 17 C.F.R. 240.10b-5.   

10. Defendant was also a necessary factor and substantial participant in an illegal 

offering or sale of unregistered securities and also violated the registration provisions of Section 

5 of the Securities Act, 15 U.S.C. § 77e.   

11. The Commission seeks civil monetary penalties and remedial ancillary relief, 

including, but not limited to, disgorgement of ill-gotten gains, injunctions, and such other relief 

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as the Court may deem necessary and appropriate.  Unless restrained and enjoined by this Court, 

Defendant is likely to continue to engage in the acts and practices alleged herein.  

JURISDICTION AND VENUE 

12. The Commission brings this action pursuant to Sections 20(b), 20(d)(1) and 22(a) 

of the Securities Act, 15 U.S.C. §§ 77t(b), 77t(d)(1) & 77v(a), and Sections 21(d)(1), 

21(d)(3)(A), 21(e) and 27(a) of the Exchange Act, 15 U.S.C. §§ 78u(d)(1), 78u(d)(3)(A), 78u(e) 

& 78aa(a).  Defendant has, directly or indirectly, made use of the means or instruments of 

transportation or communication in interstate commerce or of the mails in connection with the 

activities alleged in this Complaint, including by making use of the Internet to offer securities 

and sending or receiving interstate email and participating in interstate voice or video calls. 

13. Venue is proper here pursuant to Section 22(a) of the Securities Act and Section 

27(a) of the Exchange Act and also pursuant to 28 U.S.C. § 1391(c)(3).  During the Relevant 

Period, Partner lived in this district and carried on the unlawful affiliate marketing activities of 

Defendant and Partner from this district.  Acts, practices, and transactions constituting violations 

of law alleged in this Complaint occurred within this district.  Defendant is also no longer a 

resident of the United States, and therefore venue is proper in any district court.   

DEFENDANT 

14. Peter Szatmari, age 43, lived and worked in Hawaii and Hungary at various 

times during much of the Relevant Period.  He later lived in Austin, Texas until approximately 

May 2019, at which point he moved to Budapest, Hungary.   

FACTS 

I. AFFILIATE MARKETING IN BINARY OPTIONS SECURITIES 

15. Binary options are financial instruments with a value tied to the price of a 

reference asset, including securities and securities indices.  An investor chooses whether the 

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underlying asset’s price will rise above or fall below a certain price at a particular time (e.g., will 

Apple, Inc. stock be above $100 per share at 1 p.m. on a particular day).  The options are 

“binary” because they have only two possible outcomes: the investor with a correct prediction 

makes money; the investor with an incorrect prediction loses the investment.  Unlike other types 

of options, a binary option does not give the holder the right to purchase or sell the underlying 

asset.  Instead, it is “cash settled.” 

16. Binary options referencing a security or securities within the meaning of Section 

2(a)(1) of the Exchange Act, 15 U.S.C. § 77b(a)(1), and Section 3(a)(10) of the Exchange Act, 

15 U.S.C. § 78c(a)(10), are themselves “securities” within the meaning of those provisions. 

17. Affiliate marketers typically promote over the Internet a product or service 

provided by a third party (e.g., a vendor) who pays them when they cause someone to take a 

specific action, like clicking a link or buying the vendor’s product or service.  Here, binary 

options brokers paid Szatmari and Partner a pre-set commission (typically $350 to $450) for each 

investor who opened and funded an account with those brokers as a result of viewing fraudulent 

marketing materials that Szatmari and Partner created and/or disseminated. 

II. DEFENDANT’S FRAUDULENT OFFERS OR SALES OF BINARY OPTIONS 

18. Between 2014 and 2016, Szatmari participated in the creation and dissemination 

of at least six false and misleading marketing campaigns designed to persuade potential 

investors, predominately in the United States, to open and fund binary options trading accounts 

with overseas unregistered brokers operating on the Internet.  These Original Campaigns’ 

advertising materials generally consisted of (a) textual materials disseminated over the Internet; 

(b) a website; and (c) one or more videos embedded into the website.   

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19. The six binary options affiliate marketing campaigns that Szatmari  helped create 

and disseminate during this period (i.e., the Original Campaigns) consisted of campaigns going 

by the following names: 

Campaign Name Year 
Wall Street Millionaire 2014 
Automated Money Kit 2014 

Click Click Money 2014 
The Cash Code / Robert Allen System 2015 

Guaranteed Wealth 2015 
The Conservative Investor 2016 

 
20. Szatmari’s role in creating and distributing the Original Campaigns included 

identifying, soliciting, and/or negotiating with binary options brokers about commissions and 

other matters; creating false and misleading solicitations; obtaining, rebranding, and distributing 

automated trading software; performing accounting functions; and arranging for the bulk 

dissemination of solicitations, including through social media.  One method of dissemination 

involved paying media companies to distribute advertisements to their subscribers by email or as 

“sponsored content”, a practice known as media buying.  Partner’s work included monitoring the 

customer service email addresses associated with the campaigns and responding to investor 

emails; developing content and design for internet websites that supported the campaigns; 

registering campaign websites; and arranging for the bulk dissemination of solicitations. 

21. The materials Szatmari helped create and disseminate typically contained false 

and misleading statements touting a free and easy way to make money using a secret software 

system.  These written materials were designed to entice potential investors into clicking a link 

that would take them to the Original Campaigns’ websites that falsely described the secret 

software system and its potential to make users rich.   

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22. For example, an electronic mail message disseminated in connection with the 

Wall Street Millionaire binary options campaign read: “I’ve been cashing in an additional $9500 

weekly income ever since I started using this amazing FREE software.  Download your FREE 

copy here before they start selling it.”  Embedded in the email – typically where it read “here” – 

was a hyperlink that directed readers to the campaign website.   

23. Similarly, an email sent in connection with the campaign called Cash Code 

contained the following language: “Imagine the size of your bank balance going from $0 to 

$135,000 in the next few months.  Now imagine you did it with totally automated software. 

Software you can set up in 7 minutes or less . . . I’ve never seen anything like this. >>Read the 

shocking details and proof here<<”. 

24. Investors who clicked the hyperlink in the written materials were taken to the 

Original Campaign websites that featured the false and misleading videos.  Generally, the videos 

included the following types of misstatements: (1) false guarantees that the trading software 

would automatically generate significant profits for customers after they opened and funded 

accounts with a broker; (2) actors pretending to be real users, creators, or owners of the trading 

software; (3) fictitious depictions of customer bank and trading statements reflecting large 

balances or profits; (4) fictitious testimonials where actors claimed to have profited using the 

fake software; (5) fake “live” software demonstrations; and (6) false representations that the 

brokers to which the materials referred investors were actually “recommended” for reasons other 

than their payment to Defendant and his Partner.   

25. For example, the videos contained the following falsities: 

a. The Wall Street Millionaire videos told a contrived story about a person 

named Stanley who developed a purported system for trading binary options that 

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supposedly enabled him to generate $1.54 million in a year, or an average of $4,500 each 

day.  In reality, “Stanley” was a paid actor who never developed any software nor 

profited trading binary options. 

b. Click Click Money featured videos that included a fictional spokesperson, 

Seth Warburton, who displayed fake bank account statements reflecting nearly $800,000 

he supposedly earned in just months using the software.  The actor portraying Warburton 

falsely claimed the software “can generate between $523 and $4,098 of pure profit per 

day . . . for even the hopeless newbie,” and can pick winning trades at least 92% of the 

time. 

c. The Cash Code included a video that falsely stated that the corresponding 

software “has made more millionaires in the past 6 months than any other website on 

earth.”  Further, the video: (1) showed several fake bank account balances in the millions 

that supposedly resulted from use of Cash Code; (2) showed the supposed real-time 

growth of an account from $250 to hundreds of thousands of dollars in just minutes; (3) 

claimed the system has “100% accuracy;” and (4) stated that “All of our clients are 

financially independent within 60 days of using this system . . .on average – by that they 

require no job or any other source of income to sustain themselves from that point on.”     

d. The Guaranteed Wealth videos featured “Victor Lambert,” who 

supposedly discovered a system that picked winning binary options trades with over 90 

percent accuracy.  Lambert claimed he made “over $2.8 million in profits” over the past 

two years.  The video displayed fake account statements to show purported winning 

trades and purported real-time updates showing an account balance increasing from $250 

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to more than $23,000 in a matter of days.  The video includes a series of false 

testimonials in which purported users of the software told of their five-digit returns.   

26. The videos also falsely stated that the brokers linked on the Original Campaign 

websites were chosen because they were trustworthy or their systems contained a glitch that 

could be exploited by the software to make money.  In reality, Szatmari and his Partner chose the 

brokers only because those brokers had agreed to pay them a referral fee for each investor.   

27. Defendant knew or was reckless in not knowing that the Original Campaign 

marketing materials he helped create and disseminate were materially false and misleading.   

28. Defendant knew the stories portrayed in their videos were untrue and that the 

persons depicted were actors, not who they claimed to be in the videos.  For example: 

a. In an August 2015 email exchange with Partner looking to choose a name 

for the Conservative Investor’s main character, Defendant wrote: “we did not come up 

with a name – how about using David Blaze?  or News Max lol . . . but yeah, on David 

Blaze ;-)”.  Partner responded, “lol I dunno if I want to run David Blaze’s name through 

the mud.  People will start writing the ‘David blaze’ is a scam.” 

b. In other emails, Defendant discusses, among other things, selecting actors, 

testimonials, and scripts, and creating fake screen shots for the Original Campaigns.    

29. Szatmari knew the statements about the software touted in the Original Campaign 

materials was untrue.  In various emails, he discussed ways to appease customers who called to 

complain about not having received the software depicted in the campaign videos. 

a. In one January 2014 email, Szatmari belittled “lazy and greedy” customers 

who foolishly believed that the touted software could provide winning trades.  He then 

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considered how to respond to more wary customers – but still without offering them any 

actual software.  Szatmari wrote in his email:   

Currently we get people excited about a software and then don't give them 
anything and tell them it's included with their broker. The part about ‘it's working 
seamlessly in the background’ may not be enough for some or many people as you 
pointed out. So let's take a step back and look at what this software represents. It's the 
traders [sic] imaginary secret friend giving him the tips on what to trade and actually 
doing it. The trader does not want to think about what trades to make - he wants 
something else to make that decision for him. This something - as we told him - will 
pick the winning trades for him (and potentially even make it for them)[.]  Essentially 
we're talking about lazy and greedy person who expects and believes that some magic 
push button software will make lots of money for them - without having to make a 
decision AND act on the decision... We certainly get plenty of people who are not 
bothered by the fact that there is no software -they're either curious/excited to give it a 
try anyways and soon forget the whole software thing or actually believe that it runs 
in the background - even though they're making the trades. So for those that don't 
‘drink the cool aid’ is there something we can do to get them comfortable with the 
whole thing - by basically offering them what they look for in the software in another 
form? I think we're in general agreement that we don't want to offer the software. 

b. In a related January 2014 email, Szatmari wrote: “Any way we can get our 

hands on some silly software that we can send these guys to if they really ask? I'm 

guessing all these ‘gurus’ are using the same shit software just branded as their own.” 

c. And in a December 2013 email concerning how to reply to investors who 

asked why they had not received the software described in the videos, Szatmari wrote, “I 

think one way to appease these ‘smarter’ customers in the future is to provide ‘signals’ or 

work with brokers that do - so it looks like they're getting some help...” 

30. In February 2014, Szatmari nevertheless procured trading software from another 

affiliate marketer to give to investors persistent about the software.  In an email, he wrote “I like 

the idea of rebranding the software for us as Wall Street Millionaire (it’s probably a quick fix). 

Then we continue promoting the same way and provide the software to those that ask for it / 

complain they're not getting it.”  Defendant and Partner later rebranded this same software in 

connection with several other campaigns.   

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31. Szatmari also knew that the binary options brokers made money from investor 

deposits, as opposed to winning trades, i.e., that the brokers’ interests were not aligned with 

investors,  and that investors were unlikely to profit by trading binary options.  For example:  

a. In a May 2014 email, a broker told Szatmari that it made money from 

“customer’s losses.”  

b. In January 2015, Szatmari received an email from his Partner stating, 

“Interesting that some customers keep signing up to brokers despite being ripped off =)”.   

c. In February 2015, Szatmari wrote: “If [broker] gets more traffic than they 

can handle, his people can’t turn enough of the depositors into profitable traders.  For 

example: this week the average deposit (based on current balance) was around $300, last 

week it was $350.  He pays us $400, so they probably need to get a few hundred more 

dollars per trader on average to break even on our payout and then pay everyone, 

overhead, spotoption, processing, etc. and a profit.” 

d. In June 2016, Szatmari wrote to his Partner concerning the brokers: 

“Something Yoni [a broker] mentioned has struck me.  Namely that their customers just 

want a friend, someone to talk to, to act like their psychiatrist.  And their customers are 

basically ‘paying’ for that – with all their trading losses …” 

e. Defendant also received numerous emails from investors complaining that 

they had lost money after watching one of the Original Campaign’s videos and signing up 

with a “recommended broker.” 

32. Szatmari also knew that his and the brokers’ activities violated U.S. laws. 

a. In November 2014, Szatmari wrote to a broker: “You’ve probably already 

heard.  Supposedly (cannot verify independently lol) [Broker A] got a letter from the 

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CFTC to stop accepting US traders so they will be moving them to another brand.  I 

assume it’s what some of the others also do – get enough complaints, launch a new brand 

. . . .”  He also wrote: “To me is seems that basically they comply with the CFTC request 

and quietly move everything over to another brand . . . and the whole cycle starts over 

again.”   

b. In a May 2016 email, Szatmari admitted concern about the Federal Trade 

Commission (FTC) and implicitly admitted that he knew his Original Campaigns were 

false and misleading.  After reviewing sample advertisements used for “health offers” on 

one of the websites used to promote binary options, he wrote: “wtf . . . cure Alzheimer’s 

in 90 days? cure diabetes in 3 days? and we are worried about the ftc lol?”.   

c. In numerous emails, Szatmari admitted his understanding that binary 

options brokers violated U.S. law and engaged in fraudulent practices.  In one email to a 

broker that owed him money, Szatmari wrote:  “I will also provide them [investors] with 

instructions to contact the United States Commodity Futures Trading Commission and 

the United States Securities and Exchange Commission to alert them to the fraudulent 

business practices of the company and its owners as well as for operating a financial 

services firm without proper license in the United States.” 

d. Similarly, in August 2016, Defendant complained that it was getting more 

difficult to promote binary options in part due to “pressure from the Man in the US.” 

33. Defendant caused false and misleading materials related to the Original 

Campaigns to be sent to millions of potential investors.  The Original Campaigns’ false and 

misleading websites and videos were viewed by more than 350,000 persons and caused more 

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than 25,000 investors to make deposits for trading binary options with one of approximately 35 

unregistered brokers.   

34. These unregistered brokers offered and sold binary options referencing securities 

over the Internet to investors in the United States.  For example the table below reflects the 

securities and securities indices offered and sold by three brokers, representing approximately 

two-thirds of the referrals Defendant helped make over the relevant period.   

Broker Number Investors 
Referred 

Securities Offered Securities Indices 
Offered 

Broker 1 5377 19 (e.g., Microsoft, Apple, 
Coca Cola, Nike). 

20 (e.g., DJIA, 
NASDAQ, S&P, 

FTSE, Hang Seng) 

Broker 2 8822 20 (e.g., Apple, Facebook, 
IBM, Exxon). 

8 (e.g., DJIA, 
NASDAQ, S&P) 

Broker 3 3532 28 (e.g., Apple, Nike, Tesla, 
Netflix). 

5 (e.g., DJIA, 
NASDAQ, S&P) 

35. Defendant and Partner realized approximately $3.8 million in profits from these 

six campaigns between 2014 and 2016.   

36. Szatmari and Partner also disseminated false and misleading binary marketing 

campaigns create by other affiliate marketers (i.e. the Remarketed Campaigns).  In such 

circumstances, the broker paid the creator of the materials the commission and the creator paid 

Defendant and Partner a sizeable cut of that commission.  Defendant knew or was reckless in not 

knowing that the Remarketed Campaigns were false and misleading.  For example in the email 

previously cited above, Defendant wrote: “Any way we can get our hands on some silly software 

that we can send these guys to if they really ask? I'm guessing all these ‘gurus’ [i.e. other affiliate 

marketers] are using the same shit software just branded as their own.”  Szatmari and Partner 

realized approximately $1.66 million in additional profits through remarketing.   

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VIOLATIONS OF THE FEDERAL SECURITIES LAWS 

FIRST CLAIM FOR RELIEF 
Fraud in the Offer or Sale of Securities 

Violations of Section 17(a) of the Securities Act 
 

37. Paragraphs 1-36 are realleged and incorporated by reference herein. 

38. Defendant, by engaging in the conduct described above, directly or indirectly, in 

the offer or sale of securities by the use of means or instruments of transportation or 

communication in interstate commerce or by use of the mails: 

(a)  with scienter, employed devices, schemes, or artifices to defraud; 

(b)  obtained money or property by means of untrue statements of a material fact 

or by omitting to state a material fact necessary in order to make the statements made, in 

light of the circumstances under which they were made, not misleading; and/or 

(c)  engaged in transactions, practices, or courses of business which operated or 

would operate as a fraud or deceit upon the purchaser. 

39. By reason of the foregoing, Defendant violated, and unless enjoined will again 

violate, Section 17(a) of the Securities Act, 15 U.S.C. § 77q(a). 

SECOND CLAIM FOR RELIEF 
Fraud in Connection with the Purchase or Sale of Securities  

Violations of Section 10(b) of the Exchange Act and Rule 10b-5 
 

40. Paragraphs 1-36 are realleged and incorporated by reference herein. 

41. Defendant, by engaging in the conduct described above, directly or indirectly, in 

connection with the purchase or sale of a security, by the use of means or instrumentalities or 

interstate commerce, of the mails, or of the facilities of a national securities exchange, with 

scienter: 

(a)  employed devices, schemes, or artifices to defraud; 

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15 
 

(b)  made untrue statements of a material fact or omitted to state a material fact 

necessary in order to make the statements made, in the light of the circumstances under 

which they were made, not misleading; and/or 

(c)  engaged in acts, practices or courses of business which operated or would 

operate as a fraud or deceit upon other persons. 

42. By reason of the foregoing, Defendant violated, and unless enjoined will again 

violate, Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5 thereunder, 17 

C.F.R. § 240.10b-5. 

THIRD CLAIM FOR RELIEF 
Unregistered Offer or Sale of Securities   

Violations of Section 5 of the Securities Act 
 

43. Paragraphs 1-36 are realleged and incorporated by reference herein. 

44. No registration statement had been filed or was in effect for any of the security-

based binary options offered or sold through the Defendant’s Original Campaigns. 

45. Defendant, by engaging in the conduct described above, directly or indirectly, 

made use of means or instruments of transportation or communication in interstate commerce or 

of the mails to offer to sell or to sell such securities. 

46. By reason of the foregoing, Defendant violated, and unless enjoined will again 

violate, Section 5 of the Securities Act, 15 U.S.C. §§ 77e. 

RELIEF REQUESTED 

WHEREFORE, the Commission respectfully requests that this Court: 

a) Find that Defendant committed the alleged violations; 

b) Order Defendant to disgorge, with prejudgment interest, all ill-gotten gains he 

received or derived from the activities set forth in this Complaint, and to repatriate any ill-

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gotten funds or assets he caused to be sent overseas; 

c) Order Defendant to pay civil penalties under Section 20(d) of the Securities 

Act, 15 U.S.C. § 77t(d), and Section 21(d)(3) of the Exchange Act, 15 U.S.C. § 78u(d)(3); 

d) Order Defendant prohibited from, directly or indirectly, including through any 

entity he owns or control, participating in the marketing, offer or sale of securities over the 

Internet or by email or other forms of electronic communication;  

e) Permanently enjoin Defendant from directly or indirectly violating Sections 5 

and 17(a) of the Securities Act, 15 U.S.C. §§ 77e & 77q(a), and Sections 10(b) of the 

Exchange Act, 15 U.S.C. §§ 78j(b), and Rule 10b-5 thereunder, 17 C.F.R. § 240.10b-5; 

f) Retain jurisdiction over this action in order to implement and carry out the 

terms of all orders and decrees that it may enter, or to entertain any suitable application or 

motion for additional relief within the jurisdiction of this Court; and 

g) Grant such other and further relief as may be necessary or appropriate. 
 
 
Dated:  September 26, 2019 

 
Respectfully submitted, 
 
 
/s/ Kenneth W. Donnelly 
Kenneth W. Donnelly (DC # 462996) 
Trial Counsel for Plaintiff 
Securities and Exchange Commission 
100 F Street, N.E. 
Washington, DC 20549-5949 
Tel. (202) 551-4946 
Fax (202) 772-9282 
Email: [email protected] 

Of Counsel: 
Jennifer A. Leete 
Jason M. Anthony 

 

   Michael S. Fuchs 

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mailto:[email protected]

	I. Affiliate Marketing in Binary Options Securities
	II. DEFENDANT’s Fraudulent OfferS OR SaleS of Binary Options
	(a)  employed devices, schemes, or artifices to defraud;
	(b)  made untrue statements of a material fact or omitted to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; and/or
	(c)  engaged in acts, practices or courses of business which operated or would operate as a fraud or deceit upon other persons.