Court allows alternative service on binary options fraudster Yossi Herzog

Maria Nikolova

The CFTC is granted leave to serve Yukom Communications, Yakov Cohen, Yossi Herzog, and Shalom Peretz by alternative means.

Several months after the Illinois Northern District Court took under advisement the motion by the Commodity Futures Trading Commission (CFTC) for alternative service on a number of defendants linked to fraudulent binary options scheme evolving around Yukom Communications, the Honorable Andrea R. Wood has signed an order granting the motion.

Let’s recall that the CFTC brought this action against Yukom Communications Ltd., Linkopia Mauritius Ltd., Wirestech Limited, WSB Investment Ltd., Zolarex Ltd., Yakov Cohen, Yossi Herzog, Lee Elbaz, and Shalom Peretz, alleging various violations of the Commodity Exchange Act, 7 U.S.C. §§ 1–26 and accompanying regulations, 17 C.F.R. §§ 1–190. According to the CFTC, all but one of those defendants are located outside of the United States.

So far, the CFTC has served five of the nine defendants, and it has asked the Court to permit alternative service upon Yukom, an Israeli entity, and Cohen, Herzog, and Peretz, all Israeli citizens, pursuant to Federal Rule of Civil Procedure 4(f)(3).

On April 20, 2020, the Honorable Andrea R. Wood signed an order granting the CFTC’s motion for an order directing service upon certain Defendants by alternate means and extending the time to serve. The CFTC is granted leave to serve Yukom, Cohen, Herzog, and Peretz by alternative service by: (1) sending the Summons and Complaint by ordinary mail to their last known addresses; (2) sending the Summons and Complaint to email addresses that they have used in the past; and (3) publishing notice of the Summons and Complaint in the Times of Israel, with the notice appearing online on the publication’s homepage for a week and continuing to be available in its back pages for at least six months.

The CFTC’s request for additional time to serve Yukom, Cohen, Herzog, and Peretz is granted, but rather than setting a definitive deadline, the Court will allow Plaintiff sufficient time to serve those defendants exercising appropriate diligence.

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.

On August 14, 2019, and after confirming Herzog’s registered address with the ISA, the CFTC sent the Summons and Complaint to Herzog’s residence via Registered Mail. As of January 13, 2020, those documents cannot be traced and are therefore likely undelivered.

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.

Herzog is also among the defendants indicted in a criminal case in the District of Maryland. According to the DOJ, no representative of Herzog has contacted the US authorities.

Read this next

Inside View

Crypto Liquidity Providers: No Transaction, No Party!

One of the most integral parts of trading cryptocurrencies is ensuring seamless transactions; however, this is not always easy when you first start using cryptocurrency exchanges.

Digital Assets

Niftables launches white label NFT platform for content creators and brands

Niftables is the go-to platform for brands and creators looking to realize their NFT vision — whether they’re an individual or the biggest entertainment company in the world.

Retail FX

ACY Securities sponsors Table Tennis NSW as CFD broker bets in Australia’s youngest

ACY Securities has partnered with Table Tennis New South Wales (TTNSW) for a two-year sponsorship agreement intended to highlight the Chatswood-based multi-asset CFD broker’s brand in Australia, with a focus on the southeastern state.

Executive Moves

Peter Hetherington appointed CEO of Capital.com, Currency.com, and Shares.com

With his extensive experience driving strategy and growth for leading wealth and brokerage firms in highly regulated markets, Peter is the ideal CEO to lead the Group on its next chapter of growth and success.”

Digital Assets

Crypto platform Elwood raises $70m from Goldman Sachs, Dawn, Barclays, BlockFi, Flow, Galaxy, more

Elwood Technologies has closed a $70 million Series A funding round co-led by Europe’s largest B2B investor Dawn Capital and global investment bank, Goldman Sachs.

Industry News

Wilshire to launch Climate Change 1.5℃ Target Index with Nikkei and Hang Seng

Wilshire has announced a collective launch with Nikkei and Hang Seng to bring to market the first in a series of indexes empowering investors to transition their investments towards a low-carbon and climate resilient economy.

Industry News

Anne Boden’s Starling Bank bets big on UEFA Women’s EURO 2022 tournament

Starling Bank has launched a campaign ahead of the UEFA Women’s EURO 2022 tournament as part of its national sponsorship, the biggest ever for the bank.

Industry News

Older adults flock to financial apps as Revolut reports 215% more UK users aged 55-74 since pandemic

Data has also shown that older adults are back to travelling as the 55-64 UK age group has seen a tenfold increase in the amount spent in foreign countries over the past two years, and the 64-75 age group isn’t far behind with an 840% increase.

Industry News

Ripple replies to SEC’s last attempt and “shoves it down their throats pretty hard”

“The SEC really messed that up. How can Hinman receive legal advice from SEC lawyers for a personal opinion?”, attorney Hogan commented.

<