CFTC’s motion for alternative service on Yossi Herzog taken under advisement
Only counsel for the CFTC appeared at a hearing held earlier this month at the Illinois Northern District Court.
Although the Commodity Futures Trading Commission (CFTC) is trying to press ahead with its action against individuals and entities involved in a large-scale binary options scam evolving around Israel-based Yukom Communications, the case at the Illinois Northern District Court has seen little progress.
At a hearing held several days ago at the Court, only counsel for the CFTC appeared. According to a brief announcement by the Court made available to FinanceFeeds today, the CFTC’s motion for alternative service on a number of defendants in this case, including Yossi Herzog, was taken under advisement. This means that the motion was neither approved, nor denied.
Another status hearing has been set for April 8, 2020.
Let’s recall that, on January 15, 2020, the CFTC filed a motion with the Illinois Northern District Court for an order for alternative service on several defendants in this case – Yukom Communications Ltd., Yakov Cohen, Yossi Herzog and Shalom Peretz.
The CFTC seeks the Court’s authorization to serve Yukom, Cohen, Herzog and Peretz by: (1) sending the Summons and Complaint via “ordinary” mail, no signature required, to their last known addresses; (2) sending the Summons and Complaint by email to accounts used by the three individual defendants in connection with the fraudulent conduct at issue; and (3) publishing a notice in the Times of Israel.
On August 12, 2019, the Commission filed its five-count Complaint charging Yukom, Linkopia Mauritius Ltd., Wirestech Limited d/b/a BigOption, WSB Investment Ltd d/b/a BinaryBook, Zolarex Ltd. d/b/a BinaryOnline, Cohen, Lee Elbaz, Herzog and Peretz with fraudulently soliciting individuals throughout the United States and other countries to enter into illegal, off-exchange transactions in binary options through fictitious entities using the trade names “BigOption,” “BinaryBook,” and “BinaryOnline”.
The Complaint alleges that the Yukom defendants operated a global retail binary options enterprise whose employees and agents made material misrepresentations and omissions to induce customers to trade, including by misrepresenting the profit potential and fundamental nature of the binary options offered and failing to disclose that Yukom was on the opposite side of all customer trades, and that the defendants fraudulently accepted at least $103 million in customer funds.
The Commission has yet to serve Yukom, as well as Cohen, Herzog and Peretz. According to the CFTC, Herzog is not currently in Israel. CFTC counsel has communicated with representatives of various foreign financial regulatory agencies in an ultimately unsuccessful attempt to determine Herzog’s current geographic location and identify alternative addresses for service. Despite the Commission’s efforts, Herzog’s whereabouts are currently unknown.