On March 23, The Times of Israel published “The wolves of Tel Aviv: Israel’s vast, amoral binary options scam exposed” — a shattering investigation of widespread fraud in an industry known in Israel as “binary options” or “forex.”

Reporting by Simona Weinglass established that much of this industry, which employs thousands of people — many of them young, many of them immigrants — is nothing more than theft. Far from investing in any legitimate, conventional options-buying process, the hapless clients of the fraudulent companies are actually gambling in a crooked casino.

Presenting themselves to naive clients as responsible firms offering an opportunity to make money by trading in options on commodities, the fraudulent companies in this industry turn over hundreds of millions of dollars, perhaps even billions.

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They prey on customers attracted by tantalizing get-rich-quick ads online, in emails and through phone calls. Via a variety of ruses, customers are inveigled into placing their money on a bet as to whether a commodity will rise or fall in value. In theory, they make money if their bet proves accurate and lose their stake if it is not. In fact, the customers almost always lose their money sooner or later — because the companies stack the odds against them, or refuse to return their money until they’ve lost it all, or misreport the asset’s value. Unlike respectable brokers who charge a commission and have every interest in their clients making money, these fraudulent firms depend on their clients losing.

A minority of the victims of these fraudulent companies are native Israelis. The majority of the victims live abroad.

Israeli regulators have been unconscionably lax in tackling the fraud, which has been ongoing for several years. The Israel Securities Authority has indicated in recent days that it may finally outlaw binary options dealing, though not the companies themselves. As our article highlighted, however, any such ban will only constrain firms that defraud customers in Israel. Israel-based firms will be free to continue fleecing clients overseas. Already, many of the companies involved are adapting their operations accordingly.

Israel’s overstretched law-enforcement authorities seem paralyzed by the challenge of tackling crime hatched in Israel and perpetrated overseas via the Internet; Israel’s politicians have proven curiously, worryingly disinclined to tackle the phenomenon.

The Times of Israel has reason to believe that some of the industry’s murky secrets have yet to be exposed

The binary options scam unhappily shows the dark side of Israel’s “start-up nation” capacity for enterprise. Rather than a force for good, in this case, Israeli innovation is being used to enable theft.

For example, Israelis’ entirely legitimate expertise in Search Engine Optimization (SEO) is here being utilized in the sophisticated manipulation of Google’s search engine, whereby the companies perpetrating the fraud turn up high on Google searches, the better to attract new clients. This creates a near information blackout, where both potential clients and potential employees have little idea what they’re getting into. So skilled is the industry in manipulating Google, indeed, that anyone trying to research the industry is directed to supposedly informative websites that are often run by corrupt firms and their affiliates.

Unfortunately, Israeli fraudsters have already tarnished the country’s reputation abroad with scams such as the aggressive sale of radically overpriced Dead Sea products in shopping mall kiosks, as well as a complex rip-off involving locksmiths in parts of the United States which also relies on manipulation of Google and other search engines. The scale of the binary options fraud, however, dwarfs such scams, both in its cynicism and in the colossal sums of money involved. The longer it goes on, the greater the damage to Israel’s good name.

Read: The wolves of Tel Aviv: Israel’s vast, amoral binary options scam exposed

In the few short days since our article was published, The Times of Israel has been contacted by numerous people whose lives have been blighted by this ongoing fraud. We will be speaking to them, and following up their stories. The Times of Israel has reason to believe that some of the industry’s murky secrets have yet to be exposed.

We invite others who have worked in the industry, or who have been defrauded by it, to contact us. You can do so by email to: office@timesofisrael.com