Giambrone to provide assistance with implementation of new Israeli law banning the sale of binary options to foreign countries

Reuters reports today that the Israeli government has taken a significant step towards eradicating the scourge of binary options trading scams by drafting a law preventing the promotion and sale of binary options by online trading platforms based in Israel to their overseas clients. In the past there has been widespread criticism of the Israel government for failing to act over the dishonest practices emanating from Israel perpetrated by fraudulent investment brokers based in Tel Aviv and elsewhere. 

The Israeli Finance Ministry said that the draft amendments to the securities law had been drawn up by the Securities Authority and other government offices. The proposed law goes further than simply banning the practice of selling binary options, it prohibits any type of trading forum that is selling to overseas clients, regardless of the fact that they do not offer binary options, unless they have received a licence to trade from the country in which their overseas clients reside. Contravention of this new law will be punishable by two years in prison together with other sanctions. 

Typically binary options traders hold themselves out to be legitimate investment firms but actually amount to little more than scams with their clients making accusations of illicit movement of money and being prevented from withdrawing their money from the schemes.

Joanna Bailey, of the financial services, forex and binary options litigation team at Giambrone, commented: “it was high time the Israeli government stepped to counter the dishonest practices conducted by fraudulent Israel-based Forex and Binary Option companies”. Given its experience and expertise in bringing fraudulent brokers and companies to justice, Giambrone will strive to provide support and assistance to all competent authorities (including the Israeli government) intending to regulate the industry and assist in bringing a halt to the unlawful detrimental practices which target less-experienced investors.

Editors’ notes

Giambrone is a mid-tier international law firm and business consultancy with offices in London, Rome, Milan, Palermo, Barcelona, Munich, Mallorca, Sardinia and Tunisia; advising in both commercial and private clients on a wide range of legal and commercial issues including complex cross-border matters ranging from banking and finance, Forex fraud, mergers & acquisitions, immigration, intellectual property, cross-border debt collection and employment. There is also a strong well established LGTB division.