An expose by the Times of Israel led to widespread investigations and a crackdown on the entire industry by regulators and the Israeli government.

Let us take a look at what has happened since then. Sign Up. The financial markets in Israel are regulated by the Israeli Securities Authority ISA. However, the ISA did not actively regulate binary options. This led to a proliferation of companies and entities operating in this industry, without any form of regulation or guidelines that were supposed to streamline the operations of these firms.

As the number of companies offering binary options related services grew, the ISA began to look into the market and decided to start with the implementation of a set of rules meant to protect Israeli binary options traders.

The initial reaction of the ISA was to place a prohibition on the marketing and offering of binary options to Israeli citizens. With the local market taken away from them one fell swoop, the Israeli binary options brokers and related companies turned their attention to the foreign markets. A period of rapid proliferation of companies good, bad and ugly followed. With aggressive sales tactics, many of these companies were able to bring in funds from overseas-based traders.

The highly publicized suicide of a Canadian citizen drew unwanted attention to the industry and the ISA decided to act by pushing through recommendations to completely outlaw the industry in Israel. In June , the Knesset voted to ban the offering of binary options in Israel completely.

Presently, the industry is at the point of extinction in Israel, leaving many traders stranded. With most Israeli binary options traders unable to trade binary options with local brokers, most of them had turned to offshore brokers as a source of their trading portals.

The currency pairs listed on these platforms are the same ones found on most forex platforms. The Israeli Shekel is not listed on binary options platforms. Therefore, only major, minor and exotic currencies from other regions are traded. Assets traded do not come with spreads, even though these are used by brokers in determining the expiry value of any traded assets.

Many customers had clicked on an ad hawking ways to earn money from home. I need it to pay for this or that. Pretty much the company just refuses to give it up.

Additional clients were from Africa, Qatar and Saudi Arabia. Asked about his managers, Sam said they were young Israelis who appeared to think it was cool to rip people off. How are you doing today? In , the United States outlawed the marketing of binary options to its citizens, except on a handful of regulated exchanges. These schemes allegedly include refusing to credit customer accounts, denying fund reimbursement, identity theft, and manipulation of software to generate losing trades.

When a binary option expires, it either makes a pre-specified amount of money, or nothing at all, in which case the investor loses his or her entire investment. Trading binary options is made even riskier by fraudulent schemes, many of which originate outside the United States.

a former Wall Street broker explains to The Times of Israel. Trading binary options is made even riskier by fraudulent schemes, many of which originate outside the United States — US government warning. Graham P. He said that everyone he met who was interested in buying the platform to start their own company wanted him to create a back door. And the algorithm does that. If the customer brings proof that the price of oil did actually go up to where they predicted it would, the company will point them to the fine print, which states that the company has its own algorithms which may differ from real-time.

Individual European nations are letting binary options fly. While countries like the United States smelled the bullshit a long time ago and made it illegal. Can you imagine thousands of people in Tel Aviv out of work?

Chaya Berkowitz, an eight-year veteran of forex companies in Israel, tells the Times of Israel that her own experience in the industry has been good. Berkowitz asserts that there are legitimate companies in the industry, and rattles off the names FXCM, Alpari and FXPro, none of which are based in Israel. They have the reputation of lying to their clients and misleading advertising.

Berkowitz estimates that in legitimate forex companies, two or three out of 10 clients do earn profits and are able to easily withdraw their money. Cyprus, she claims, has become stricter in recent years. Personal word of mouth is huge. I would do my homework. Look online to see who has a good reputation. I would ask questions when researching a broker.

Do I have easy access to my money? Do you offer education? I wanted to find something more competitive, more similar to what I was earning in the United States.

People kept mentioning to Lynne that binary options jobs paid well. At each interview, Lynne probed extensively as to the nature of the job. Each company has its own marketing methods, often involving videos that tell the story of a person who learned a secret method of extracting money from the market, she says.

If you want to make serious money, you need to start trading, and we can tell you how. Lynne was eventually offered a retention job, and was enrolled in a two-week training course. The first thing she was told was to never reveal she was calling from Israel. All retention staff were asked to pose as trained brokers working out of a London office.

You needed to think of a business school and say that you went there. You needed to say that you were a trader, that you had worked for either an investment bank or on Wall Street. The company, she said, was regulated in Cyprus. In binary you see 70 percent coming in right away. If conversion agents were expected to get a client to make their first deposit, retention agents like Lynne were tasked with bringing in the big money. The first step was to size up the customer. Also, when we offered training to them, we would share their desktop and walk them through the website.

So what is it you actually want to make in a year? If you want to achieve it you need to trade every day. When the broker chose a stock for them to bet on, the stock would often perform as promised. When they got on the platform and made their own picks, they started losing. Then the broker would come back and help them make some good calls, and they would win again.

Some are really sweet, some try to identify with them, some try to make them feel awkward — whatever the technique is that gets them to deposit. But you will never get to that amount. The longer you trade, the more money you lose, says Lynne. However, Lynne says again, with her company, if you resisted the temptation to take the bonus, and if you put in a request, the company would send you your money.

In fact, they encouraged people to take small withdrawals. When I tell people about this job, they are shocked. Marom said in the letter that he had been searching for a job in recent months and as a Russian speaker had interviewed with forex companies that operate in Israel and target customers abroad. He said he was surprised at the sheer magnitude of the fast-growing industry.

Marom added that after years in the traditional banking industry, he was shocked at the practices he witnessed in several forex companies. A casino hands you your winnings immediately. Their complaints never reach our justice system and so the industry is not exposed.

How is it possible that this has been happening for years, with no local regulation? What happens when thousands of Turks, Russians, Spaniards, Italians and French figure out that the scam they fell for was carried out from here, in Israel? Are our regulators waiting for synagogues to start blowing up all over the world to shut this thing down?

The Times of Israel tried to track Marom down, but the CEO of FeeX, a high-tech startup he used to blog for, said he had not heard from Marom for a few years and had no contact information. The cyber intelligence company did, however, make some interesting observations about the forex and binary options industries. Ben-avi mentioned several companies known to be operating from Israel. Most of the time, when you have a company that large, you can see the owner, you can see the shareholders.

Ben-avi conducted an automatic search with a system that scours hundreds of thousands of sites and closed dark web forums. Jared K. Where is it coming from and where is it going? There are rules as to how someone can access money in a claim.

Furthermore, says Jared, in the United States, a license to sell securities or handle client investments would require a person to meet certain ethical standards. That is fraudulent. If I called up your parents and said put money in this investment and they lost it all, in theory I could be arrested and go to jail.

What happens if someone loses money? The broker is not giving you a service like in a bank; he is personally betting against you. Sometimes that fraud is very sophisticated. What the industry does need, he says, is real-time regulation. Via a variety of ruses, customers are inveigled into placing their money on a bet as to whether a commodity will rise or fall in value.

In theory, they make money if their bet proves accurate binary options israel comapnies lose their stake if it is not. Unlike respectable brokers who charge a commission and have every interest in their clients making money, these fraudulent firms depend on their clients losing.

A minority of the victims of these fraudulent companies are native Israelis. The majority of the victims live abroad. Israeli regulators have been unconscionably lax in tackling the fraud, which has been ongoing for several years. The Israel Securities Authority has indicated in recent days that it may finally outlaw binary options dealing, though not the companies themselves. As our article highlighted, binary options israel comapnies , however, any such ban will only constrain firms that defraud customers in Israel.

Israel-based firms will be free to continue fleecing clients overseas. Already, many of the companies involved are adapting their operations accordingly.

Rather than a force for good, in this case, Israeli innovation is being used to enable theft. So skilled is the industry in manipulating Google, indeed, that anyone trying to research the industry is directed to supposedly informative websites that are often run by corrupt firms and their affiliates.

Amid the failure of Israeli police and prosecutors to effectively investigate and prosecute perpetrators of online fraud, Israeli courts are seeing a slew of civil lawsuits by alleged victims overseas against Israelis they allege have defrauded them through binary options and related schemes.

Israeli court filings show that dozens of lawsuits have been filed against Israeli binary options companies by former clients in the United States, the United Kingdom, Australia, New Zealand, South Africa, Denmark, Sweden, the Netherlands, Switzerland, the Czech Republic, India, Belize and Singapore, as well as numerous alleged victims of investment fraud from Israel itself.

Despite the slew of civil lawsuits, and an ongoing stream of US Justice Department prosecutions of Israeli binary options fraudsters, there is little indication that Israeli police are actively investigating alleged binary options and related investment fraud. One investigation that was commenced in resulted in police determining that the owner of a binary options company was not guilty of any wrongdoing, according to a document seen by The Times of Israel.

Whistleblowers who have spoken to Israeli police about investment fraud perpetrated from Israel have described the police reaction as either indifferent or seemingly daunted by the complexity of an investigation that would involve multiple jurisdictions and documents in foreign languages. Yoram Fay, an attorney who has sued several Israeli binary options companies on behalf of plaintiffs abroad, believes that civil lawsuits can provide some relief to the alleged victims.

At a certain point the defendants understood that it was in their interest to pay up. The unscrupulous firms would dupe victims into believing that they were investing successfully and earning money, and encourage them to deposit more and more into their accounts, until the company eventually cut off contact with the investor and disappeared with all or almost all of their money.

Many of the fraudulent operatives have since moved their operations abroad, or switched to other scams while continuing to operate from Israel. The vast majority of the perpetrators have enriched themselves at the expense of victims around the world while enjoying impunity and suffering little social stigma. Below are synopses of several binary options-related lawsuits recently filed in Israeli courts. In almost every case, the plaintiffs traded on a website and spoke to people in a call center that they claim defrauded them.

The most difficult task for most of these plaintiffs was to associate an Israeli company or individual with the website that allegedly defrauded them since binary options and forex companies often go to great lengths, using offshore companies, generic IP addresses and fake names, to hide the identities of their operators.

The company, they alleged, operated the binary options websites FMarket. com and FMCapitals. All of their money was lost. The couple claimed that as a result of their losses they have suffered financial and psychological distress and owe hundreds of thousands of dollars in taxes that they are unable to cover. In addition to CMT Global Trading, two Israeli men, Daniel Kibel, Ibrahim Abu Ita, and a British citizen named David Kyte are defendants in the lawsuit.

All four defendants deny any connection to binary options and claim that their company merely provided marketing services to forex and other investment companies abroad. They further claimed that their company has a license in South Africa. Also in December , a year-old man from Indianapolis sued an Israeli company called Tracy P.

The man, represented by Israeli lawyers Eldar Peretz and Michael Gal, lost that amount, he alleged, to a website called RumeliaCapital. The complaint alleged that when the plaintiff tried to withdraw his money he was unable to do so.

Eventually, the website was shut down entirely with no recourse for the plaintiff, the lawsuit alleged. He claimed that Rumelia Capital was a foreign binary options website for foreigners and has nothing to do with Israel. He further argued that binary options was not against the law in Israel before legislation was passed to ban it in October While he acknowledged that the company he owned, Tracy P. had no agreement with the end customer and merely provided services to the broker.

In September both sides asked the judge to reject the lawsuit with no order as to costs. Peretz, attorney for the plaintiff, told The Times of Israel that he was not at liberty to disclose the conditions of the settlement. Another lawsuit against Tracy P. and David Israel Cartu was filed in July and has advanced to the discovery stage.

The plaintiff, a Minnesota woman who is represented by lawyers Nimrod Assif and Haggai Carmon, is suing the defendants for NIS 5. com when the site suddenly went offline in March She further alleges that Tracy ran BeeOptions. The complaint alleged that a company known as Global Transaction Services processed payments for BeeOptions.

At a later date, processing was carried out by a company called Greymountain Management. Documents submitted by Cartu as part of the discovery process listed several companies that had acquired credit card payments for binary options companies through Greymountain Management. These were Credorax, Wirecard, Transact Pro, and Max Pay.

In December , a year-old man from India sued an Israeli company called Pay Trade Service Ltd. In his defense, Mor said he does not own Trade12 and that it is owned by Exo Capital Markets Ltd. The judge had suggested that Fay file the case again in the future should he obtain more evidence. In May , a Swedish woman sued Y. Central Ltd. In court, Maor Azhari claimed that after a rough patch in his life, during which he had been in a rehab program and lost his parents, he had met a French immigrant to Israel named David Yosef who had persuaded him to register the company Y.

Central Ltd in his name. In September , a man from Holland sued L. In order to trade with AtosLimited. com, the plaintiff allegedly wired money to the bank account of a company called Harty Asia Electronics Co. Ltd at HSBC in Hong Kong. In an earlier lawsuit in which Lankry was sued by his business associate Maor Korem, Lankry claimed that he had in fact owned the atoslimited. com website together with Korem and two other silent partners.

Korem said that he and Lankry and two other people had started a telemarketing company together but did not mention its name and said that it had failed due to mismanagement. In July , a Canadian woman living in Belize, represented by attorney Eldar Peretz, sued two men allegedly behind the website OptionRally.

The plaintiff sued the company, E. Peled and Fromchenko, a scion of the family that owns the Elite chocolate company, said in their defense that OptionRally had a license from the Belize Financial Services Commission. They also said that the plaintiff had signed a waiver acknowledging that trading binary options is high risk and there was a danger of losing all her money. The pair further argued that OptionRally was owned by a company called TCM Investments incorporated in Belize, and that therefore Israel is not the right jurisdiction for her lawsuit.

Furthermore, she had signed an agreement that any dispute with the company would be resolved by a court in Belize. The case was ultimately settled out of court and the lawsuit withdrawn with no order as to costs. Attorney Peretz told The Times of Israel he could not disclose the terms of the settlement. In September , a year-old Swedish man sued Israelis Chen Malka, Sharon Malka and their father Gil Malka, as well as a man named Nadav Gover and two Israeli companies called S.

Marketing and G. Media Software. The plaintiff, represented by lawyers Adam Ashkenazi and Raouf Najjar, sued for 47, euros, which he claimed to have lost to the allegedly fraudulent website IntegraOption. The defendants argued that the lawsuit should not have been filed in Israel when the contract was between a foreign citizen and a foreign company. They claimed that the plaintiff had absolutely no evidence that IntegraOption was connected to the defendants. The lawsuit was ultimately settled out of court with no order as to costs.

Attorney Najjar told The Times of Israel he could not disclose the conditions of the settlement. The plaintiff, through her lawyer Lior Shaby, claimed to have been defrauded by a website called PorterFinance. The defendants Benharav and Maymon denied any connection to Porter Finance and told the plaintiff that she was suing the wrong people. The case is ongoing and the next court hearing will take place on December The man was represented by attorney Lior Shaby.

The defendants never mounted a defense and in April the judge ordered them to pay the plaintiff NIS , along with NIS 25, in legal fees. In December , a Dutch man, represented by attorney Yoram Fay, sued Jack Henry Wygodski, Avi Itzkovich and Yael Fuks for 68, euros. The three defendants were allegedly owners and executives of the websites TraderVC. com and Tradorax, which were run by a company called Rax Media OOD in Bulgaria. According to the lawsuit, Rax Media recruited Israelis and encouraged them to relocate to Bulgaria to work in its call center.

A private detective hired by the plaintiff spoke to ex-employees of the company undercover. One of them reportedly told her that employees of the Bulgarian call center sensed that law enforcement authorities had been sniffing around nearby.

A woman from Australia, represented by attorney Edith Millet Bar Oz, sued the Israeli company Paperclick Marketing Ltd. She said she eventually lost her entire pension and is in danger of losing her home. Paperclick Marketing claimed in its defense that it merely provided services to Fintech Software, Inc. On December 1, the plaintiff submitted an amended complaint, which named an additional man, Tommy Agami, as a defendant.

The woman sued Israelis Uri Katz and Adi Marom and the Israeli company UKFM Ltd. The defendants have denied that they had anything to do with the company the woman allegedly lost her money to. The next hearing in the case will be on December 22, An American man represented by attorney Yoram Fay has sued Silverpop Media Ltd. and Citrin Technologies Ltd. The plaintiff alleges that the defendants are owners and employees of two companies that operated the binary options website StarlingCapital.

The plaintiff alleged that Greymountain Management processed payments for Starling Capital. The defendants have all categorically denied that they had anything to do with the website StarlingCapital.

US authorities are increasingly tackling the fraud, however. Five additional former employees of the firm have pleaded guilty to conspiracy to commit wire fraud while 15 others have been indicted. On October 9, the SEC sued the Israeli owners of the websites LBinary and IvoryOption.

On September 30, the SEC also charged two US-based affiliate marketers, David Sechovicz and Peter Szatmari, with selling binary options through false and misleading videos, websites and internet advertising. In November , Jason Scharf, the CEO of a binary options company called CiTrades, pleaded guilty in the United States to a criminal charge of conspiracy to commit wire fraud.

I joined The Times of Israel after many years covering US and Israeli politics for Hebrew news outlets. I believe responsible coverage of Israeli politicians means presenting a degree view of their words and deeds — not only conveying what occurs, but also what that means in the broader context of Israeli society and the region.

Israeli attorney Raouf Najjar Facebook. The Times of Israel contacted Yaron-Eldar to ask her about alleged fraud within the binary options industry. However, Shurki says CFDs will be regulated in real-time and aggressive or deceptive sales tactics will be rendered illegal. The scale of the binary options fraud, however, dwarfs such scams, both in its cynicism and in the colossal sums of money involved, binary options israel comapnies. Authorities say Yuri Dashevsky is part of an organized gang that from to persuaded investors to invest in fictitious financial instruments.

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