The binary options industry in Israel is commonly regarded as a fraudulent practice taking advantage of innocent investors around the world. The problem is disturbing authorities in Europe, where discussions are being held on how to put a stop to cases of fraud committed in Israel at the expense of European residents. Sources inform "Globes" that Israel Securities Authority head Prof. Shmuel Hauser flew to Paris late last week to take part in these discussions, and explained the Securities Authority's plans for dealing with the problem to the heads of the European securities authorities.
27 heads of European securities authorities took part in last Friday's discussion at a meeting of the European Regional Committee of the International Organization of Securities Commissions (IOSCO), of which Israel is a member.
European Regional Committee chairman and Belgian Financial Services and Markets Authority chairman Jean-Paul Servais expressed the concern of all European countries about the involvement of Israelis and Israeli companies in the sale and distribution of binary options to the public in European countries. In the discussion, Servais said that over 90% of the investors lose their money to these concerns, and that this business is accompanied by fraud and deception of the investors in many cases. He called for putting an end to this very unacceptable practice. Servais added that the Belgian Financial Services and Markets Authority had decided to ban trading in binary options, and that the French Autorité des marchés financiers (AMF) (Financial Markets Regulator) had done the same thing. Servais and the AMF chairman said that as far as they were concerned, trading in binary options was now banned in Europe.
Hauser made it clear to his European colleagues that he shared their concern about options trading, and described the Israel Securities Authority's actions to eliminate the phenomenon. He noted that since many innocent people had been hurt, some of them economically disadvantaged people who had lost their money in these trading theaters, the Securities Authority was taking action on several levels including a change in the existing law to expand its authority to concerns offering binary options trading exclusively to overseas investors. The Securities Authority currently has authority only over concerns offering binary options trading to the public in Israel.
Hauser also spoke about cooperation with all the law enforcement authorities in Israel , including the Attorney General, Israel Police, Israel Tax Authority, and the Israel Money Laundering Prohibition Authority, in the campaign against binary options trading. Hauser also said the Israel Security Authority had conducted over 20 judicial inquiries in the matter over the past three years at the request of the securities authorities in Europe and the US. He noted that additional courses of action to end the practice were being considered.
A ban on trading in Israel
The unsavory character of the binary options industry has been exposed in recent years, including in a series of articles published in "Globes" about the questionable methods of recruitment and investment, which are more like gambling than securities trading. Hauser told "Globes" that the Securities Authority had declared total war against binary options. "The greed of the crooks in the binary options sector knows no bounds and their long claws reach every corner of the earth. We get complaints from those harmed and authorities from North America via Europe, East Asia and even Arab countries. There is no need to elaborate about the damage to Israel's image that this matter is causing Israel and the Jewish community worldwide," Hauser told "Globes."
The binary options has been exposed bit by bit in recent years, shocking many in the process. First it was former employees of various companies who exposed this industry's work methods: salaries in the tens of thousands of shekels for young people aged 23-25 offering, attracting, and tempting investors to entrust their money to companies in the industry using false representation and lies, while knowing that the investors would lose their money.
Whatsapp and Facebook groups calling for putting an end to the practice then began to surface. Stories about fraud spread like wildfire, and victims and former employees of these companies began to organize conferences aimed at combating fraud. Those operating in the industry quickly acquired the nickname "Wolves of Tel Aviv" (in imitation of the popular movie "Wolves of Wall Street"), and talk began to spread about putting an end to binary options trading.
Last March, the Securities Authority banned the marketing of binary options to Israelis, and began campaigning for legislation to forbid the overseas marketing of binary options by Israeli companies. Securities Authority sources told "Globes" that the legislation would be completed in the coming weeks. Meanwhile, companies operating from Israel are continuing their unhindered marketing of binary options to customers in the US and European countries. Both the victims and the European authorities are asking when the Israel Securities Authority will put an end to the practice.
Published by Globes [online], Israel Business News - www.globes-online.com - on February 2, 2017
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