As Israelis swelled with pride at the homecoming of our Olympic athletes, The Times of Israel learned that five young athletes — all medal hopefuls for Tokyo 2020 — are being sponsored by the owner of a binary options firm with a track record of illegal and fraudulent activity.
Last month, the Olympic Committee of Israel announced that five of the country’s most promising athletes — 17-year-old rhythmic gymnast Linoy Ashram, 23-year-old Greco-Roman wrestler Andrei Tsaryuk, 18-year-old judoka Raz Hershko, 21-year-old fencer Yuval Freilich and 21-year-old boxer David Albrdian — will each receive a generous monthly scholarship to help them prepare for the 2020 Olympics.
The sponsorship for the five athletes selected by the Olympic Committee is a private donation of Oren Shabat (Laurent) and his wife Sivan. Shabat is the CEO and co-owner of Banc de Binary, an Israel- and Cyprus-based binary options firm that in March of this year was ordered by a US court to pay over $11 million in restitution and penalties for illegally soliciting US customers.
John Berry, a senior lawyer for the US Securities and Exchange Commission, said in a May 2016 interview with BBC radio that not only had Banc de Binary sold ostensible financial products to investors without being licensed to do so, but it had deceived those investors as well.
“We presented evidence to the court that Banc De Binary was telling US-based investors that Banc De Binary was actually based on Wall Street, and we had evidence of online chat discussions where a Banc De Binary broker would tell a US investor, ‘Hey, I live, you know, right down the street from Wall Street, I’ve got a Wall Street address, I work there,’ and so they had repeatedly lied to US-based customers about being in the United States and being based in the United States with a US address on Wall Street and a New York-based phone number.”
Regulators in Australia, New Zealand and Canada have issued warnings against Banc de Binary for illegal activity. Another brand that appears to be associated with Banc de Binary, Option.fm, has been blacklisted by financial regulators in Ontario, Hong Kong, Australia and New Zealand.
The Times of Israel has in recent months been detailing massive fraud by Israeli binary options firms, beginning in March with an article entitled “The Wolves of Tel Aviv.” The fraudulent firms purport to be guiding their customers in making lucrative short-term investments, but are in fact using various ruses, including misrepresentation, allegedly manipulating rigged trading platforms and outright refusal to return deposits, to steal their clients’ money.
All local binary options firms are now banned by the Israel Securities Authority from targeting Israelis, but the firms remain free to seek clients abroad. The US has banned overseas binary options firms from targeting its citizens, and numerous countries, including the US, Canada and France, are investigating Israel-based binary options fraud on behalf of their citizens who have been cheated. Belgium last week became the first European country to ban the industry, in a move that takes formal effect on Thursday, August 18.
The head of the Israel Securities Authority, Shmuel Hauser, told The Times of Israel last week that the global scam perpetrated by Israel-based firms is doing immense harm to Israel’s reputation and promised to tackle the fraudulent industry. Branding the binary options industry in Israel “repugnant,” “immoral” and profoundly damaging to the country, Natan Sharansky on Monday urged Israeli regulators to do everything in their power to close it down.
Asked whether the negative reputation of Israel’s binary options industry had caused the Olympic Committee of Israel to reconsider accepting sponsorship from Banc de Binary CEO Oren Shabat (Laurent), Bruria Bigman, the organization’s spokeswoman said no.
“As we announced last month,” the Olympic Committee told The Times of Israel, “businessman Oren Shabat Laurent recently gave a personal donation to Olympic athletes. The scholarship is intended to go directly to five excellent athletes who are slated for the Tokyo 2020 Olympic team and who were recommended by the Olympic Committee of Israel. The donation, to the best of our knowledge, is part of Oren Shabat Laurent and his wife’s greater social contribution to the community and to Israeli society. It should be clear that this was a personal donation to the Olympic Committee and has no connection to the business activities you described.”
The UK’s Liverpool FC football club, which has come under fire in the British media over the past year for accepting sponsorship from Banc de Binary, did not respond to The Times of Israel’s inquiries as to whether it plans to renew the sponsorship.
Sports team sponsorship has been a favored PR move of many Israeli-owned or Israeli-run binary options firms. Thus, Interactiveoption.com has partnered with OGC Nice, BuzzTrade has teamed up with FC Porto while EZTrader has joined forces with AS Monaco.
Several Israeli binary options firms are owned by prominent figures in the sports world. EZTrader is partially owned by basketball coach Pini Gershon, who coached Israel’s Maccabi Tel Aviv basketball team to several European championships and was voted Euroleague coach of the year in 2005.
Another Israeli binary options firm, USG Capital, was founded by prominent Israeli entrepreneur Itamar Patishi, and later sold to Tomer Sinai, a former owner of the Hapoel Petah Tikva soccer team who was arrested in 2011 as a suspect in a scandal involving the alleged rigging of soccer games for purposes of illegal gambling. The case was later closed due to lack of evidence. The Israel Securities Authority recently denied USG Capital’s license to operate due to multiple fraudulent practices it discovered when it inspected the company.
Raoul Wootliff contributed to this report.