| TEL AVIV
TEL AVIV May 16 The owner of an Israeli binary
options firm has been arrested on suspicion of fraud and
extortion after an investor abroad reported losses of more than
$500,000 to the online company, Israeli police said on Tuesday.
Israel already banned the domestic sale of binary options
last year, the first country to do so, and is now seeking to
extend the ban to firms selling them abroad as well. A draft law
is pending parliament approval.
The man from Tel Aviv is suspected of fraud, false
registration, threats and extortion, police said in a statement.
It gave no further information on the woman who filed the
The arrest, which police said came after an undercover
investigation lasting months, is the first since the authorities
announced a crackdown on binary option firms, many of which
critics describe as nothing more than high-pressure scams.
A Reuters special report published in September 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. More than 100 operators are
estimated to be based in Israel, a technology hub.
Binary options involve placing a bet on whether the value of
a financial asset - a currency, a commodity or a stock - will
rise or fall in a fixed time frame, sometimes as short as a
Investors have accused some of these Israeli firms of
transferring money between accounts without approval and in some
cases of preventing them from withdrawing their own funds.
The head of Israel's financial regulator said in November he
was working with authorities in the United States, Britain,
France and Belgium to investigate complaints against Israeli
firms selling binary options internationally.
(Editing by Raissa Kasolowsky)