Is­rael plans ban on bi­nary op­tions scam

The Jewish Chronicle - - WORLD NEWS - BY SI­MONA WEINGLASS

THE IS­RAELI gov­ern­ment un­veiled draft leg­is­la­tion on Tues­day aimed at shut­ting down the coun­try’s en­tire bi­nary op­tions sec­tor, a largely fraud­u­lent on­line trad­ing in­dus­try.

The bi­nary op­tions in­dus­try, which be­gan about 10 years ago in Is­rael, has mush­roomed. To­day, more than 100 com­pa­nies fleece hun­dreds of thou­sands of “in­vestors” all over the world out of bil­lions of pounds — with lit­tle in­ter­ven­tion from the Is­raeli po­lice or se­cu­ri­ties reg­u­la­tors.

Over the past year, partly as a re­sult of ex­po­sure by the Times of Is­rael, other Is­raeli me­dia out­lets and UK news web­sites, the Is­rael Se­cu­ri­ties Au­thor­ity (ISA) has been “flooded” with com­plaints from al­leged vic­tims of the scam and se­cu­ri­ties reg­u­la­tors in other coun­tries.

The ISA and the Is­raeli Min­istry of Jus­tice have now in­tro­duced draft leg­is­la­tion that, if passed, will shut down the en­tire in­dus­try within Is­rael’s borders — both the call cen­tres and the web­sites that tar­get would-be in­vestors in Is­rael or abroad.

The leg­is­la­tion would im­pose a pun­ish­ment of up to two years in jail for in­di­vid­u­als who con­tinue to sell bi­nary op­tions in­vest­ments af­ter the law goes into ef­fect.

“The draft of the law will give ex­cep­tional au­thor­ity to the Is­rael Se­cu­ri­ties Au­thor­ity,” ISA chair­man Sh­muel Hauser told the Knes­set State Con­trol Com­mit­tee, “be­cause this in­dus­try gives Is­rael such a bad name and in­flames an­ti­semitism.”

The draft leg­is­la­tion must pass through sev­eral Knes­set com­mit­tees be­fore it can be voted on.

The chair­man of the State Con­trol Com­mit­tee, Yesh Atid MK Karine El­harar, promised to fast-track the leg­is­la­tion, but a lawyer fa­mil­iar with the process told the Times of Is­rael that the draft was likely to en­counter well-funded op­po­si­tion from lob­by­ists for bi­nary op­tion firms.

“The bi­nary op­tions in­dus­try has hired Roni Ri­mon, one of Is­rael’s most ex­pe­ri­enced and pres­ti­gious pub­lic re­la­tions pro­fes­sion­als, to make its case be­fore the Knes­set,” said the lawyer.

“He is not com­ing out di­rectly against the law but rather ar­gu­ing that the in­dus­try should be reg­u­lated. I don’t think many MKs will vote against this law but they can say things like, ‘We need clar­i­fi­ca­tions, we need to con­sult ex­perts, we need to de­bate it’.”

At the Knes­set hear­ing on Tues­day, two op­po­nents of the draft bill made the ar­gu­ment that Is­rael’s bi­nary op­tions in­dus­try was “too big to fail”.

Yanir Melech, the owner of a pri­vate in­ves­ti­ga­tions and se­cu­rity firm, said he had learned about the bi­nary op­tions in­dus­try through his work and es­ti­mated it em­ployed 20,000 Is­raelis di­rectly and 60,000 in­di­rectly, in­clud­ing 4,0005,000 Is­raeli Arabs.

“You see the build­ing boom right now in Tel Aviv? Well you can just say good­bye to that be­cause most sky­scrapers in Tel Aviv will be empty. There will be no one to fill them up.”

Mr Ri­mon, who said he was speaking on be­half of the Euro­pean Union Bi­nary Op­tions As­so­ci­a­tion (a group of Is­raeli-run bi­nary op­tions firms that are reg­u­lated in Cyprus, al­low­ing them to legally tar­get EU in­vestors) sug­gested that in­stead of ban­ning the in­dus­try, the ISA should reg­u­late it “with very strong teeth.

“If the law is passed, I don’t think we will change the world or make it a bet­ter place but we will hurt thou­sands of work­ers,” Mr Ri­mon told the Knes­set ses­sion.

“This ar­gu­ment is truly ridicu­lous,” said Nim­rod As­sif, a lawyer for bi­nary op­tions vic­tims. “The fact that this in­dus­try be­came so gi­gan­tic is not a rea­son not to shut it down, but a rea­son to shut it down faster.”

Nev­er­the­less, the other lawyer who spoke to the Times of Is­rael said: “If the lob­by­ists are suc­cess­ful, they could de­lay the leg­is­la­tion for a long time.”

The draft law to shut down the in­dus­try will be fought by a well­funded lobby

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