* Securities regulator seeks amendment to give him more
* Israel banned sale of binary options to Israelis in March
* Hauser disturbed by “ugly phenomenon” that hurts people
By Tova Cohen
TEL AVIV, Oct 27 Israel’s securities regulator
wants to expand his authority so he can ban the sale of binary
options overseas by online trading firms based in Israel, a
business that is drawing international criticism over
allegations of illicit practices.
The Israel Securities Authority in March became the world’s
first regulator to prohibit the risky transactions from being
offered domestically. Now its chairman, Shmuel Hauser, has asked
the attorney general to consider amending the law to give him
power to target groups marketing them abroad as well.
A Reuters special report published last month shed light on
the extent of the industry and accusations by London-based
lawyers who say hundreds of their clients were duped out of vast
sums of money by some Israeli firms.
“The Israel Securities Authority is working vigorously with
other enforcement agencies to deal with this issue,” the ISA
said in a statement.
“Hauser is very disturbed by this ugly phenomenon that hurts
innocent people and unfortunately fuels a negative image of
Israelis and Jews.”
An amendment to the law would likely require parliamentary
approval. A spokeswoman for the ISA said she could not estimate
how long such a process might take. The attorney general’s
office was not immediately available for comment.
Binary options involve placing a bet on whether the value of
a financial asset – a currency, a commodity or a stock – will
rise or fall in a fixed timeframe, sometimes as short as a
minute. Many large operators are based in Israel.
The fast-growing industry sells itself as a legitimate
investment, but clients of some of the firms say they are little
more than high-pressure scams. They accuse the companies of
transferring money between accounts without approval and in some
cases of preventing them from withdrawing their own funds.
Because they are based online and allow trading from
smartphones or tablets, the industry has attracted a vast number
of users who are not professional dealers.
After numerous complaints, Hauser banned the online trading
firms from selling binary options to Israelis, but he did not
have the authority to prevent them from marketing overseas.
Other countries, including Belgium, have since banned binary
options trading. The United States requires binary options to be
traded on regulated markets. Elsewhere, online operators
continue to operate freely, and are effectively unregulated.
Despite the ban on selling to Israelis, several of the
biggest binary options businesses are either run from Israel
with Israeli technology, sales and support staff, or are
registered to Israeli citizens.
Calling binary options trading “in essence gambling”, Hauser
in the statement quoted from the biblical Book of Isaiah, saying
“your destroyers and they that made you waste shall go forth of
All possible measures must be taken to stop them, he added.
The ISA said it is aiding securities regulators around the
world to deal with binary options “criminals” when they request
(Editing by Richard Balmforth)