The binary options bill will be presented to the Knesset next Monday, October 23. The bill passed the Reforms Committee headed by Kulanu MK Rachel Azaria and will be presented for its second and third reading on the first day of the Knesset's winter session immediately after a no-confidence motion in the government is discussed.
The new bill when enacted will close a loophole in the Israel Securities Law, which allows overseas clients to trade in binary options, which are considered a form of gambling. Israelis are already prohibited from engaging in binary options trading.
The problematic methods in which capital is raised in Israel's binary options industry - an investment, which has more in common with gambling than securities trading - have been publicized by a series of articles in "Globes." In these articles, former employees have revealed the tricks of the trade with young people aged 23-25 earning huge monthly salaries of tens and even hundreds of thousands of shekels in order to attract and tempt investors to hand over their hard-earned money. False presentations and deceit were used in the full knowledge that the investors would lose their money.
Over time, complaints from deceived investors began to mount. In March, Israel Securities Authority (ISA) chairman Shmuel Hauser banned marketing binary options products to Israelis and began initiating legislation to prohibit Israeli companies from selling binary options abroad. The ISA insists that binary options is a form of gambling.
Last month, "Globes" reported that the FBI arrested Lee Elbaz, CEO of Israeli binary options company Yukom Communications, at JFK Airport in New York, on suspicions of securities fraud in contravention of US federal laws. Representatives of Yukom, were among the few representatives that attended the Knesset Reforms Committee discussions on the subject (as reported by the "Times of Israel"), and tried to explain why there was no need for legislation to ban their work in Israel. Elbaz has been placed under house arrest.
Published by Globes [online], Israel business news - www.globes-online.com - on October 16, 2017
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