Despite CFTC’s efforts, whereabouts of Yossi Herzog remain unknown

Maria Nikolova

According to the regulator, Herzog is not currently in Israel and attempts to determine his current geographic location have been unsuccessful.

As the United States Commodity Futures Trading Commission (CFTC) tries to press ahead with its action against a large-scale fraudulent binary options scheme evolving around Israeli firm Yukom Communications, the regulator continues to experience trouble with locating the defendants in the case and effecting service on them.

Earlier today, 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, an Israeli entity, and Cohen, Herzog and Peretz, all of whom are Israeli citizens currently located outside the United States.

Herzog is an Israeli citizen who resided in Zichron, Israel during the relevant time.

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 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

Digital Assets

FTX Japan has until March to return customer assets

The Kanto finance bureau of Japan’s Ministry of Finance (MoF) said it will extend its business suspension order for FTX Japan, the Japanese arm of the beleaguered crypto exchange FTX.com.

Executive Moves

Johan Wiese replaces Richard as director of IG South Africa

IG Group, Europe’s largest online trading platform, has relocated its Finance Chief Operating Officer (COO) Johan Wiese to join its South Africa business as a director.

Digital Assets

Nexo continues European expansion with Polish licence

Crypto lender Nexo said today that it had been registered as a virtual currency operator with the Ministry of Finance in Poland, which enables its European-based entity to provide services to the country’s residents lawfully.

Digital Assets

Wirex expands crypto lineup to 130 tokens

Payment and crypto wallet provider Wirex has listed 52 new tokens on their app, bringing the total number of supported digital assets to 130, alongside 13 fiat currencies.

Executive Moves

Capital.com lures IG’s long-serving exec Greg Adams

Multi-licensed online brokerage group Capital.com has appointed Greg Adams, who spent the bulk of his two-decade career at IG Group, as its newest head of risk.

Digital Assets

Farcana and Dravus join forces to line up sustainable mining power sources

As a result of growing ecological awareness, the sector’s top companies have been working to achieve effective cryptocurrency mining while still being energy-efficient: e.g. using mining facilities fueled by renewable power and located in colder regions to lower heat-dissipation costs.

Retail FX

Vantage to expand swap-free trading offering after savings of $1 million in gold XAUUSD

The swap-free product enhancement was designed to provide greater convenience for gold XAUUSD traders. Clients are not charged overnight fees when trading across all trading accounts, including on the Vantage App, regardless of trade size.

Digital Assets

Bosonic launches Cross Custodian Net Settlement to further eliminate settlement risk

Bosonic has announced the go-live of Cross Custodian Net Settlement (CCNS) in which trades in USDC and ETH were executed, cleared, and settled atomically between two digital asset custodians, First Digital in Hong Kong and Propine in Singapore.

Industry News

IntraFi taps Broadridge to offer loans to costumers of brokers, advisors, and RIAs

“Broadridge’s partnership with IntraFi expands the availability of securities-based lending to previously underserved parts of the market — community and regional banks, independent broker-dealers, and unaffiliated advisors and RIAs.”

<