Binary Options bust: 30 shell companies uncovered in Scotland

British police cite binary options “UK’s biggest ever internet scam” as 30 shell companies uncovered in Scotland

30 Scottish shell companies masking the identity of Israeli binary options fraudsters who pretend to be British in order to steal a fortune by offering a fake trading environment.

The net is closing in on the nefarious and amoral binary options racket.

Over the past few months, police investigations, arrests, blanket bans by national governments and widespread reports and investigations in national media have emerged, highlighting the multi-million dollar fraud that is binary options, emanating from Israel – a country in which binary options is illegal – where market makers and platform providers with the business acumen of a woodlouse peddle their sordid schemes to fleece unsuspecting members of the public overseas.

As the pressure mounts and the likelihood of binary options being stopped completely – especially if Professor Shmuel Hauser, Chairman of the Israel Securities Authority (ISA) manages to push through his new ruling to acquire powers to be able to act internationally rather than domestically to put paid to the entire business, which he considers is bringing enormous disrepute upon the entire nation.

One of the ruses that binary options brands and their respective market makers have used since their rise to prominence is the use of false names, and structures which involve several layers, usually making their business or origin untraceable via the use of shell companies in multiple jurisdictions.

One such region, it has now emerged, is Scotland.

The Scottish Herald conducted an investigation into this, finding that thirty shell companies exist in Scotland, all of which are acting as fronts for binary options brands, which the British police now consider to be Britain’s largest internet scam.

This particular investigation by the Sunday Herald has identified a total of around 130 UK-registered firms providing an EU smokescreen of respectability to unregulated “binary options” websites, many run from call centres in Israel. Scottish firms make up more than a quarter of the total.

The police uncover two sites per day, however they consider this to be the “tip of the iceberg” and are making a point that these sites are fraudulent due to the false premise that customers are led to believe that they are investing in financial instruments, when in fact no real market exists and the entire system is rigged so that customers lose.

The Scottish firms acting as formal owners of the website are all limited partnerships or SLPs, a kind of business which allows their owners to be secret, file no accounts and pay no taxes.

UK Security Minister Ben Wallace last week told MPs that “intelligence assessments from law enforcement” on the abuse of SLPs were “very concerning”.

An SLP based in Dundee called T.S.I.E is one example, as it acts as front for a website called DGI Market, which earlier this month was fined half a million shekels – more than £125,000 – by the Israeli Securities Authority in the first major crackdown on binary options operators in Tel Aviv. DGI was found to have provided financial services in Israel without a licence.

FinanceFeeds has investigated these call centers over the years, and found that many are based in Israel, and that the employees are encouraged to use false names and to lie about their location. Some are better at this than others, as it has come to our attention that some of the sales people – whose sole job it is to force people to deposit – have a very limited grasp of the geographical layout of the surrounding area that they claim to be from. “I am calling from Dublin, Ireland, UK” is a common one to watch out for. Last time I looked, Ireland was not part of the UK.

Britain’s Financial Conduct Authority (FCA) has issued a blanket warning on using such sites, and although it considered regulating binary options as a financial instrument two years ago, a decision was made not to do so, with the FCA having issued a publicly available notice stating that it had no intention to regulate binary options due to the number of complaints and scams that have come about.

“Many consumers report having been scammed by these firms and we have concerns that UK consumers are being increasingly targeted by fraudsters who offer opportunities to invest in binary options” – FCA, July 2016.

Despite this, firms which provide market making and platforms to binary options fraudsters have managed to establish presence in the UK.

Roger Mullin, the SNP’s Treasury spokesman and a campaigner for the reform of SLPs, wants the UK to follow other nations and ban binary options.

“Masquerading as investment opportunities, binary options are unregulated, unethical gambling on financial markets, but where the investor-punters are systematically stripped of all of their funds. That some are now using SLPs to give a smokescreen of legitimacy while hiding the identity of the crooks running such operations, is doubly concerning.” – Roger Mullin, Treasury Spokesman, Scottish National Party

Whilst America, Belgium, Israel, Germany, Denmark, France and Holland have all categorically banned binary options and in some cases placed sanctions on the payment processors that allow transactions to be carried to such firms, Britain lags behind in not stamping it out on a national basis. Yes, the police are investigating and the FCA will never regulate it, however an iron fist approach is necessary and Britain needs to take that step, especially when considering that Britain’s responsibility includes safeguarding the reputation of London’s top quality electronic financial services environment which comprises the largest and highest level of Tier 1 banks and institutional liquidity providers in the world.

According to the report, formal ownership of the con has been migrating to Scotland and the rest of the UK from traditional Pacific tax havens in recent months. Additionally, a lobby group of unofficial back-street binary options executives has been formed, called EUBOA – a misspelled acronym for European Brokers Association, which aims to attempt to fight the corner for the binary options business as it faces global decimation by authorities and police. When looking at its members and founders, their chances of managing to state a good case in front of international law makers is as likely to succeed as a monkfish attempting to climb Mount Everest.


#biggest scam, #binary options, #British Police, #Scotland, #shell companies

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