International lawyer Gabriele Giambrone last week sent a letter to Israel’s Justice Ministry informing it that his firm
represents 2,500 clients allegedly defrauded by binary options and
forex companies. Many of these companies operate from Israel, he wrote,
and pleaded for Israel’s help in bringing them to justice.
The Israeli regulatory and enforcement
authorities have so far failed to take any action,” the London-based
lawyer wrote in the April 5 letter, “despite the widespread knowledge of
where these companies are based, which offices they are operating from
and who are the individuals behind it. It appears that none of the
regulators are interested, so investor protection falls down the chasm
between the net.”
In fact, as The Times of Israel reported last month,
for almost a decade Israel has played host to the activity of an online
trading industry, a great deal of it fraudulent, that has fleeced
hundreds of millions of dollars, possibly billions, from hundreds of
thousands of customers globally, while Israeli authorities have opted to
look the other way. [...]
What happens if not just a handful of Arab
clients, but thousands, tens of thousands, or hundreds of thousands,
realize they were defrauded by people calling from Israel?
“It’s certainly not good for Israel,” said Gadi Wolfsfeld, a professor of political communication and hasbara
(public diplomacy) at IDC-Herzliya. However, he added, from a
diplomatic point of view, most Jews and Arabs think whatever they think
about the (Israeli-Arab) conflict and a single event will not change
those views over the long term. [...]
For his part, Giambrone said that the fact
that so much alleged fraud is being traced to Israeli individuals is
“putting a bad light on Israeli industry worldwide.”
“Israel used to be known as the startup
nation,” he said. “Now its reputation is being tainted by the fact that
there are a number of crooks using Israeli IT ability to create very
pretty fake websites, using SEO (search engine optimization) and Google
to target victims into thinking they are doing legitimate trading.”
Giambrone said that aside from salaries, he
believes much of the ill-gotten gains of fraudulent forex and binary
options companies never enters Israel but is siphoned to offshore
companies.
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