Author: SteelEye
29 January 2025
The U.S. District Court for the Northern District of Illinois entered a default judgment against an international group of offshore entities and individuals involved in a global binary options fraud scheme. The Commodity Futures Trading Commission (CFTC) announced that the default judgment found these five foreign-incorporated companies and three Israeli citizens liable for fraudulent activities that harmed retail customers (including U.S. residents).
Operating under fictitious trade names such as BigOption, BinaryBook, and BinaryOnline, the defendants misled customers about the profitability of binary options and utilized deceptive practices—including misrepresentations of broker identities and credentials, manipulation of trading platforms, and obstruction of customer withdrawal requests.
The entities involved are Yukom Communications Ltd. (Israel), Linkopia Mauritius Ltd. (Mauritius), Wirestech Limited d/b/a BigOption (Marshall Islands), WSB Investments Ltd. d/b/a BinaryBook (Anguilla, UK, St. Vincent and the Grenadines, Gibraltar), and Zolarex Ltd. d/b/a BinaryOnline (Marshall Islands). The individuals found liable are Yossi Herzog, Lee Elbaz, and Shalom Peretz.
Fraudulent Solicitations
Defendants used phone calls, emails, and websites to claim high profitability for binary options trades.
Brokers told potential customers they would earn quick returns on short-term trades. In reality, the majority of clients lost money.
Misrepresentation of Broker Identities
Individual brokers used false names and fabricated backgrounds, claiming trading expertise or U.S. locations while operating from overseas.
A broker who introduced himself as a seasoned Wall Street professional was neither located in the U.S. nor held the claimed credentials.
Misappropriation of Funds & Bonus Misrepresentations
The defendants misused customer deposits for their own gain and made “bonuses” or “risk-free trades” sound beneficial. In truth, these offers complicated or blocked customers’ withdrawal requests.
Platform Manipulation
The trading platform’s “risk settings” were adjusted to limit or prevent customers from winning trades.
When a customer’s trade was “in the money,” the platform might abruptly shift the payout logic, lowering returns or negating the trade’s success.
Total Monetary Sanctions: $451.6 million
Parallel Criminal Actions
"Defaulted Defendants misrepresented that binary option transactions were profitable, when in fact the substantial majority of their customers lost money, and the individual brokers misrepresented their names, financial expertise, and physical location." (Court Document, Page 5, para 19)
"Defaulted Defendants also used manipulative and deceptive devices to perpetuate their binary options scheme, including manipulating the Platform’s risk settings to limit or prevent customers from being “in the money” with winning trades." (Court Document, Page 6, para 21)
"Defaulted Defendants misappropriated customer funds and made additional misrepresentations to customers in order to thwart customers’ attempts to withdraw their funds, including failing to disclose material information about so-called “bonuses” and “risk-free trades.”" (Court Document, Page 6, para 20)
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