A recent article published on March 23rd, 2016 in The Times of Israel, exposes many of the previously unknown tricks these organizations recur to, in order to scam people into thinking that the binary options they offer are a legitimate investment. According to the article, the wolves have been hiding in plain sight, under the Middle Eastern sun. It seems that the binary options scams are flourishing in Tel Aviv and the surrounding areas, and have turned possibly into a billion dollar industry.
Further reading into the article reveals just how dubious the scammers are, as well as the various maneuvers they employ to evade the authorities. The wolves understand that when they sell their binary options scam to a person, they are only liable for securities fraud in the country where the victim is. That means that as long as the target is not an Israeli citizen, the Israel Securities Authority cannot target them because the victim falls out of its jurisdiction.
To make matters worse, these binary options scams are supported by a series of dummy corporations set up in a variety of countries to cover up the scamming activities. Once a victim wants to complain and report it to the authorities, be them local or the Israeli police in this case, he or she cannot point a finger to any specific company or organization. On paper, the entities that are located in Israel, serve as service providers to the dummy company, which in turn is located – on paper at least – in a third country. Going after the dummy company is also impossible, because it either doesn’t really exist, or it is just a company that provides services to another shell company.
The wolves often take on “stage names” in order to provide an additional layer of cover against possible prosecution. They know that the authorities cannot launch an investigation without knowing the name, address, and other details of the alleged perpetrator. That is also the reason why no one really knows who the CEO’s of these binary options companies are. No one can find them.
However worrying this situation might be, international cooperation between regulators and authorities does take place. The problem is that the scammers know how to embed themselves within that area that no one can go after, a kind of no man’s land within the global village. It seems that the more interconnected we are, the more wolves get together in packs and prey on the innocent. The advantage is that we have more power to expose them, and if we cannot get the authorities to act, we might be able to generate enough awareness to placate the demand for binary options scams.
