State of Israel begins arresting binary options firm owners as police make swoop

The crackdown starts as Israel’s Police swoop and begin arrests. Today, a 38 year old binary options brand owner was arrested in Tel Aviv on account of fraud, blackmail, making threats and operating a false trading system – basically the exact ethos of what binary options is all about. Are the perpetrators finally about to face the music?

Why Israel's FX and binary industry is completely different

During the past few months, FinanceFeeds has been instrumental in conducting in-depth research into the methods by which the fraudulent binary options ‘industry’ works, and has made substantial reporting efforts for what we consider to be the greater good of the genuine electronic trading industry.

Since its rise to prominence in 2011, binary options has been a thorn in the side of the retail and institutional FX and wider electronic trading business, as binary options platform providers / market makers steal millions of dollars from private individuals all over the world who believe that they are investing in a financial product, when in actual reality, it is nothing of the sort.

Gambling against a house that is completely weighted in favor of the house itself, in this case the platform providers, all of which are based in Israel, and all of whom do not come from the genuine financial services business or technology industry, instead hailing from lead-buying (and in some cases  lead-stealing!), casinos, adult entertainment and affiliate marketing, yet disguises itself as a currency trading system, binary options is one of the largest fraudulent activities on the agenda for many financial regulators and governments in a large number of countries.

The global crackdown on binary options extends from China, where Baidu has banned any form of media marketing by binary options firms, to North America, where providing OTC binary options to a retail audience is a serious felony and contravenes the Exchange regulations set out by the Securities and Exchange Commission.

In Europe, blanket bans of binary options have been implemented by national governments, and the City of London Police considers binary options to be the “biggest internet scam in history” yet very few people orchestrating this appalling villain of the peace and casting a shadow over the genuine electronic trading industry have actually been brought to book.

Last year, Professor Shmuel Hauser, Chairman of the Israel Securities Authority (ISA), the country’s national financial markets regulator, stood up in the Israeli Parliament – The Knesset – and said that he views it as his personal responsibility to put an end to this ‘filth’ that is destroying the commercial reputation of the State of Israel, which has been long renowned for highly advanced technology, breakthroughs in medical science and world-firsts in many extremely advanced areas that have stood the country as a pinnacle of business excellence, the strength of the national economy being testimony to this.

The binary options fraud, which largely has emanated from Israel over the past few years, has done tremendous damage to the country’s reputation as a pillar of the business community, caused extreme misery for millions of victims globally and is at the top of the list of the country’s priorities.

Although most of the fraudulent binary options businesses do not operate within Israel – binary options is illegal in Israel – they register their firms offshore, layer their companies in a method by which former US and Israeli secret agent Haggai Carmon said resembles “terrorism and espionage activities” and target customers in overseas nations where Israel’s government has no jurisdiction, hence they have thus far got away with it.

A trip to the centers of where these entities exist will reveal the sordid nature of the beast – very unpleasant, and operated by semi-literate villains who have raked in millions and rule their entities by fear.

Indeed, many dissenters of the industry have received physical threats from owners of binary options brands, and their respective market makers, something that is alien to any civilized electronic trading center globally, (and that I have never ever witnessed in my 26 year career – Ed).

Today, in Tel Aviv, the Police have finally begun to hold the government true to its word, and have begun arresting owners of binary options firms.

The police have today arrested a 38 year old binary options brokerage (brand) owner, the charge being that he is suspected of receiving money fraudulently and conducting extortion by threats.

According to the Police, this particular individual owns a binary options brand, and is accused of conducting false trading in binary options and receiving fraudulent money from foreign customers.

In addition, the man was suspected of the usual antics that we have come to expect from these ghastly indivuduals, that being false company registration, threats and blackmail.

The investigation was opened following a complaint by a customer who lives outside of Israel, according to which the company lost more than half a million dollars. The man will be brought today for a remand hearing at the Tel Aviv Magistrate’s Court.

FinanceFeeds contacted Israel Police’s official spokesperson, who declined to comment on the identity of the individual. FinanceFeeds will continue to research and discover who this was and which company he represented, however the importance of the news here is that the arrest was made for exactly what binary options firms carry out as common practice.

This action has taken place just as many binary options mainstays have begun to cut and run.

Banc de Binary ceased its activities in binary options a few months ago, however the company is working on a new product, which means that it is far from defunct.

TRADOLOGIC was sold this week, and its new owners will move it away from binary options. Whilst the firm is operated from Sofia, Bulgaria, its origins at time of inauguration are well and truly Israeli. Additionally, CEO of SpotOption Pini Peter stepped away from his leadership position earlier this year.

As far as disregard for law and order is concerned, the very nature of the companies is anathema to organized and civilized commercial behavior, Weighted platforms that are often operated by those with a propensity toward threats and force that specifically set out to deceive investors globally and are run like boiler rooms by the aggressive elements of the lower end of society are never going to take heed of regulatory bans or laws instigated by the civilized world.

For this reason, soliciting clients in the United States, despite it being a securities fraud and despite Banc de Binary having settled with the CFTC for $11 million for failing to cease to onboard US clients, did not deter anyone.

The tower from which the firm operates its business is a hive of illegal activities, being host to companies that illegally call members of the public globally and charge them money on the false premise that they can get them a Green Card to reside in the US (when the only genuine way is directly via the US Department of State) and other lottery and telephone sales based ruses operated by several similarly structured firms.

Indeed, FinanceFeeds is well aware that in some cases, 75% of revenues of some binary options market makers and several of their brands come illegally from the United States. When FinanceFeeds raised this issue with those concerned, a threat of violence was made (and recorded).

Last year, FinanceFeeds reported that the Israeli and French police and authorities were working together in order to find and prosecute 15 fraudsters which had been on the boards of directors of several firms in Israel, those being 4XP, BForex, Sisma Capital, Tradaxa and Aston Invest, all of which the French government believe to be involved in a massive scam operation that took an average of €210,000 from each victim in France.

The companies involved conducted their business in the usual fashion that is adopted by those who live from the losses of their clients and have deliberately set their firm up to take deposits, then rig the trading platform and never send orders to the markets in order to effectively steal from their customers before cutting and running.

The majority of the firms involved were structured in a way in which a holdings company is operated as a ‘service provider’ based in Israel, which then provides outsourced services to a sales desk, also in Israel but under a different name, and then registers its operations in the British Virgin Islands or a similar offshore region, and targets customers across the world but not in Israel itself, where the owners of the companies live.

Most of these firms have since cut and run, and the large majority of their owners are now – yes you’ve guessed it – operating similar fraudulent schemes by running binary options brands.

It would be of great benefit to the investing public, and to the genuine electronic trading industry that is run and operated by the most diligent and qualified professionals in the world’s genuine financial markets economy, if this morning’s arrest is the first of many.

FinanceFeeds continues to support the genuine and bona fide electronic trading industry, retail and institutional, and its respective technology providers that have dedicated their careers to making this one of the most avantgarde and sophisticated business in the world.

 

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