Breaking Development – Israeli Prosecutors indict operators of Binary Options scheme iTrader

Finally. It was overdue that the Israeli authorities also took action against binary options fraudsters in their home country. Over the past two years, the authorities in the US and Europe have taken decisive action against binary options fraudsters. Most of them are Israelis. Their schemes have defrauded tens of thousands of investors worldwide and stole up to $10 billion annually according to the FBI. Now, finally, the first binary options scheme is being accused in Israel – iTrader and its operating entity Gal Media Trader Ltd.

According to Simona Weinglass of the Times of Israel, Israel’s state prosecutor intends to indict the iTrader binary options scheme orchestrated by an Israeli citizen. He and several senior executives of his operating company Gal Media Trad Ltd are charged with aggravated fraud and giving investment advice without a license. It would be the first time Israeli binary options executives will be indicted in Israel for their binary options activity.

While iTrader (www.Itrader.co.il) sold binary options investments to Israeli customers, its sister brand FMTrader (www.fmtrader.com) offered investments to clients outside of Israel. However, the announced indictment is for the company’s activities with Israeli clients only. Gal Media Trade has been sued more than 30 times in Israeli courts, for the most part by Israel-based investors, Simona Weinglass reported.

The Prosecutors’ different approaches

After a first analysis of the prosecution’s announcement by the Times of Israel and Israeli lawyers, however, there seem to be differences in the approach of the prosecutors in the US and Israel. The comparisons refer to the U.S. indictment of Israeli Lee Elbaz in the Yukom Case. The former CEO of boiler room operator Yukom was found guilty of fraud in connection with the sale of binary options by the jury in early August 2019.

The US government said that the binary options agents misrepresented the fact that the company and sales agents earned money from investor losses. The sales agents said that they make money when the investor makes money and this was false. This revenue model was common to all forex and binary options companies in Israel. They earned money from net deposits, which is deposits minus withdrawals. This is a key point and does not appear in the [Israeli] state prosecution’s press release.

Israeli attorney Nimrod Assif (Statement for the Times of Israel)

The U.S. also charged binary options operatives with misrepresenting their names, experience, and their location. The iTrader brokers evidently did not do, since it was obvious they were calling from Israel. While both the prosecutors in the U.S. and Israel have accused the boiler room agents of lying, so far only the U.S. prosecutors have also accused the failed repayments and withdrawals.