Israeli financial regulator the Israel Securities Authority (ISA) has come under scrutiny once again due to Binary Options, but this time from a different angle.
After more than a year of public and media pressure for the ISA and its then-Chairman Shmuel Hauser to “do something” about the rash of Binary Options brokers based in the country which were taking clients from abroad and mistreating them, Israel recently passed a Binary Options ban law, which took effect just this week.
And, the ISA in parallel began running a series of online and TV commercials in Israel to help inform the public and make people more aware in identifying investment scams. The campaign starred several celebrities.
The problem, it turns out, is that one of those celebrities – legendary Maccabi Tel Aviv basketball coach Pini Gershon – was himself a shareholder in one of the Binary Options brokers. Mr. Gershon (pictured above) was also once the subject of a tax investigation. And the longtime manager of Maccabi Tel Aviv during his tenure as coach, Moni Fanan, committed suicide in 2009 – after his death it was discovered that Fanan owed a reported $20 million after running an (illegal) investment and lending operation involving several Maccabi players, all occurring under the nose of Coach Gershon.
The disclosure of Pini Gershon as a 9% shareholder dating back to 2010 in Binary Options broker BOption.com has now led the ISA to freeze the campaign, and places another stain on the reputation of the Israeli regulator as far as its handling of everything that has to do with Binary Options.
As far as as enforcement of Binary Options fraud, both the ISA and the white collar crimes division of the Israel Police force have remained under pressure for having done nothing to date, despite widespread reports of Israel based Binary Options brokers having defrauded clients over the years. US authorities, meanwhile, have been more active. We reported last week that FBI investigators came to Israel at the beginning of the month and raided the offices of Binary Options platform provider SpotOption, as part of its preparations for the upcoming trial of Lee Elbaz. Ms. Elbaz, the former CEO of Binary Options brand BinaryBook.com owned by Yossi Herzog’s Yukom Communications Ltd, was arrested in New York in September.
The video starring Pini Gershon can be seen here.