Israel Police last night arrested three suspects - capital market veteran businessman Itschak Shrem and former Clal senior executive, Short Trade CEO Shlomi Neuman and a third person. The three were arrested on suspicions of money laundering, aggravated fraud and securities offenses.
The arrests followed a police investigation of Short Trade, which operates a platform for investors trading on the US stock markets. The police had received more than 80 complaints from customers in Israel against the company's owners, claiming fraud and deception.
Short Trade is registered as a company in the British Virgin Islands and has Israeli branches in Jerusalem and Bnei Brak. Customers were found as part of collaborations with colleges offering courses in stock market trading with the colleges proposing that the students invest their money through them.
The suspects alleged modus operandi was to show a presentation to traders proposing they make investments via the company with some of the investors' money never even being invested in the stock market. Short Trade's owners, it is suspected, apparently used the money to pay out profits to other customers.
The customers deposited their money in a bank account that was presented to them as a trustees account and they were handed a false presentation about regulation by the US authorities. In actual fact the money was transferred from the company's account to an account abroad. At the start of the month, Short Trade declared bankruptcy.
The three arrested suspects are Shrem (70), Neuman (36) and another senior executive from the company (27) from Kiryat Arba. Neuman's remand has been extended by the court to May 22. Shrem was arrested at Ben Gurion airport yesterday when returning from abroad and after being questioned, he was released by the court under restrictive conditions.
Shrem's attorney Michal Rosen-Ozer from the Chen Yaari Rosen-Ozer & Co law firm said, "On his return to Israel Mr. Itschak Shrem was questioned by police and answered all the questions posed by his investigator and released to go home. Without going into the heart of the matter, it should be mentioned that to the regret and astonishment of Mr. Shrem, hios name has been mixed up with an affair in which he is a victim and in which money has been stolen from him. Mr. Shrem trusts in the police to faithfully perform their work."
Published by Globes [online], Israel business news - www.globes-online.com - on May 16, 2018
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