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European regulators grill ISA over binary options fraud

Feb 06 2017
By
Jonathan Smith

Representatives of some of the European financial markets regulators have asked their Israeli counterpart to explain what measures it is taking to tackle the largely fraudulent binary options industry that is operating mainly out of Israel. 

 
According to a report of The Times of Israel, this happened during a meeting of Shmuel Hauser, head of the Israel Securities Authority (ISA) with the heads of 27 European chief securities regulators as part of the European Regional Committee meeting of IOSCO (the International Committee of Securities Commissions) in Paris in the end of January. 
 
During the meeting, Jean-Paul Servais, head of Belgium’s Financial Services and Markets Authority (FSMA) and chairman of the European Regional Committee of IOSCO, expressed the Europeans' concern with “the involvement of Israelis and Israeli firms in the sale and distribution of binary options to the European public”, the media reports. He noted that over 90% of the investors in binary options companies lose their money and this is often accompanied by fraud. Servais also said this must be stopped and noted binary options were altogether banned in Belgium.
 
Another participant in the meeting, Steven Maijoor, who chairs the European Securities and Markets Authority (ESMA), told the meeting that binary options should be banned in all of Europe.
 
According to The Times of Israel, Servais also asked Hauser about binary options. Hauser responded that he was preparing legislation to combat the fraud associated with binary options and was cooperating with Israeli law enforcement agencies. 
 
Even though trading in binary options in Israel is illegal, the industry, which is mostly based and operating out of Israel, is thriving. According to various estimates, there are at least 100 binary options brokers that are either based in Israel, or are otherwise connected to the country and make anywhere between $1 billion and $10 billion per annum. 
 
TAGS: israel  isa  binary options  fraud 
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