A day after being appointed deputy minister in charge of public diplomacy, former Israeli ambassador to the US Michael Oren has recommended an inquiry into Israel’s binary options industry, calling revelations of a massive global scam defrauding hundreds of thousands of international customers “very, very disturbing.”
Following a Knesset committee meeting on Tuesday that dealt with challenges facing new immigrants, Oren told The Times of Israel that the fraudulent industry, which openly recruits multilinguals for its Israel-based call centers, has the potential to damage Israel’s international standing in the world and contribute to efforts aimed at delegitimizing the Jewish state.
“Leaving aside the profound moral questions this raises,” he said, referring to reports estimating that billions of dollars have been stolen from unwitting customers by fraudulent Israeli binary options firms, “I come from the field of foreign policy, protecting Israel from delegitimization and BDS [the boycott, divest and sanction movement]… These activities threaten Israel’s legitimacy.”
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 allegedly manipulating rigged trading platforms, to simply steal their clients’ money.
Oren said that the industry will “contribute to those who want to delegitimize us if these charges turn out to be absolutely true. It’s very, very disturbing… horrible.”
Local binary options firms have now been banned by the Israel Securities Authority from targeting Israelis, but they are still free to target people abroad. There are more than 200 brands operating from Israel.
Asked if he would back banning binary companies from operating from Israel altogether, Oren said he would first “sign on an effort to explore” the full impact of the industry, and recommended a Knesset inquiry into the issue.
“I have thought about holding a hearing — I don’t know if I am going to do it now because I have a new job [as deputy minister] so I have had to give up my position as a chairman of a classified subcommittee that deals with foreign policy,” Oren said. “But I think that the next person who has that job should look at, if something like this is documented, how is it liable to impair and harm relations with other countries. That’s a very legitimate question.”
Oren’s exact responsibilities as deputy minister remain unclear, but it appears he will be working alongside Prime Minister Benjamin Netanyahu who also currently serves as foreign minister. Oren joined the ranks of the newly formed Kulanu party in 2014 following four years of service as ambassador to Washington after being appointed to the job by Netanyahu in 2009.
Oren’s comments on the risk that the binary options industry poses to Israel echo those of industry experts who have spoken out against the fraudulent practices.
Last month the chief investment officer for BlueStar Global Investors, Steven Schoenfeld, told the Times of Israel that the streams of complaints by individuals in Europe, North America and beyond who say they have been ripped off by these companies, and the tracing of those responsible back to Israel, sully Israel’s image.
“The fact that a shady and probably illegal industry exists in Israel as a an open secret is a huge contingent liability for Israel’s reputation,” he said.
Schoenfeld said, “If it is allowed to continue it will play directly into the hands of the wide cross-section of Israel-haters, whether it’s the BDS movement or the Palestinian anti-Israel orchestrated efforts or the UN, and do enormous damage to everything Israel has achieved.”