Binary options staff fired as company exits Israel

Binary options Photo: Shutterstock

Two traders earning NIS 45,000 and NIS 63,000 per month were dismissed without severance pay when G.M. Media Software left for Georgia.

N, a 23 year-old young man worked over the past year at G.M. Media Software Solutions, marketing and trading in binary options. He had a pre-tax salary of NIS 45,000 per month. R, 24, worked at the same company over the same period and had a pre-tax salary of NIS 63,000 per month.

The monthly sales of each one of them amounted to tens of thousands of dollars, earning them fat bonuses. The company employed 10 other salespeople like N & R who sold tens of millions of dollars annually in binary options. But suddenly the party was over.

Last month N & R lost their jobs overnight and the company, the two former young employees claim, did not honor their employees' social rights as they fled the country and moved their operations to Georgia. They are suing the company and its owner, Nadav Gover, and the case once again exposes the notorious binary options industry and the profits it generates.

In the lawsuit filed on behalf of N and R in the Tel Aviv District Labor Court by Adv. Hanoch Ehrlich – the two ex-employees are suing for NIS 500,000 from G.M. Media Software Solutions for salary, severance pay, and lack of notice. N & R are claiming unlawful termination of employment as the company moved operations to Georgia. "The claim in question concerns the indisputable firing of two young employees in their early 20s without even paying them the severance payment due to them by law," the suit charges. The entire story of two young people earning tens of thousands of shekels per month and being owed NIS 500,000 is no big surprise. Over the past year there have been revelations by former employees about the work practices of the binary options industry and how young people earning high salaries persuade innocent victims to put large sums into investments that are certain to lose.

However, recently, the Israel Securities Authority (ISA) has been trying to eliminate the Israeli companies in the binary options industry. Following the prohibition against selling binary options in Israel, the ISA is now focusing on ending marketing to foreign customers outside of Israel. The ISA is promoting Knesset legislation that would completely ban binary options trading from Israel.

Basic salary and bonuses

In their suit, N and R claim that G.M. Media Software Solutions, like other binary options traders, were in the habit of employing, "Young and inexperienced workers and training them on the job."

But when, according to the suit, the company and its owner Nadav Grover understood that "the arms of the law were closing in on them," they acted swiftly to close down the company's operations in Israel and move to Georgia. As part of this move, it is alleged, most of the company's employees were fired, including N and R, and employees in Georgia were trained for the job.

N, born in 1994, worked at G.M. Media for 15.5 months, from November 2015 until February 2017. When he began working there, he received a basic monthly salary of NIS 7,000 and bonuses according to sales, which included 4% of monthly sales up to $50,000, 7% of monthly sales up to $130,000 and 8% of sales above that.

According to N, Gover the owner of the company, would frequently tell company employees that, "you aren't here for your basic salary." It was clearly communicated to N and R that their salary would grow according to results.

N's lawsuit states that following great success in his job his average monthly salary was NIS 44,310.

R, born in 1993, began working at the company in November 2015 until he was fired last month. His work agreement also had two components - a basic monthly pre-tax salary of NIS 9,000 plus bonuses. However, R claims that his salary underwent changes because of satisfaction about his work and he was put in charge of other employees and received commission from their performance.

"R also proved himself as a devoted and excellent employee and his average monthly salary in the 12 months before his dismissal was NIS 62,297, of which his basic salary was NIS 9,000 when he began, rising to NIS 10,000."

Both former employees mention in their lawsuit that the revenue that they generated for the company was just a small part of overall revenue with 10 other sales employees working alongside them. "A crude calculation of G.M. Media's revenue shows annual revenue of tens of millions of dollars annually. This fact makes the circumstances of their dismissal and the refusal of the defendants to fully pay up all the more outrageous."

Layoffs without hearings

The background to the layoffs of N and R is the bad reputation gained by Israel's binary options companies and the efforts being made by the ISA to have them outlawed. The suit says, "In 2016, negative publicity grew about companies like G.M. Media, which are engaged in binary options trading." The suit mentioned the recent series of articles in Globes about the fraudulent behavior of binary options companies.

Published by Globes [online], Israel business news - www.globes-online.com - on March 19, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

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Binary options Photo: Shutterstock
Binary options Photo: Shutterstock
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