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US court convicts Israeli for role in binary options fraud

August 8, 2019 at 6:43 pm

Lee Elbaz, former CEO of Israel-based Yukom Communications [Twitter]

A US court has convicted Lee Elbaz, former CEO of Israel-based Yukom Communications, of three counts of wire fraud and one of conspiracy to commit wire fraud in connection with a global binary options scheme.

Barry Pollack, a lawyer for Elbaz, told Reuters by email on Thursday that the court jury in the US state of Maryland “got it wrong” and his client would appeal against her conviction on Wednesday. The US Justice Department did not immediately respond on Thursday to requests for comment.

Binary options involve placing a bet on whether the value of a financial asset – a currency, commodity or stock – will rise or fall in a fixed time, sometimes as short as a minute.

The indictment charged that Yukom provided investor retention services for two websites, BinaryBook and BigOption, that were used to promote and market binary options and that those binary options were fraudulently sold and marketed.

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Elbaz, a 38-year-old Israeli citizen, faces sentencing on Dec. 9. Five other defendants in the case have pleaded guilty and are scheduled to be sentenced in the coming month, according to the Department of Justice’s website.

Elbaz was arrested by the FBI in September 2017 on arrival at New York’s JFK airport from Tel Aviv.

The Israeli parliament approved a ban on local firms selling binary options overseas by online trading, giving regulators the authority to crackdown.

A Reuters special report in 2016 shed light on the rapid rise of the industry in Israel. London-based lawyers said hundreds of their clients were duped out of vast sums of money by some Israeli firms.