Tel Aviv Court Orders in Favour of Woman who Lost Savings to Binary Options

Plaintiff claimed she sold her grocery store and lost it all through false investment advice.

Six months ago the Israeli financial regulator banned Israeli binary options companies from offering services abroad, in a continuation of the earlier ban on them offering services within Israel.

In a new development, a Tel Aviv court has ordered one such company to repay a portion of the losses suffered by one of its customers – 60 percent, according to local news outlet The Marker.

The case concerns a 54-year-old woman who sued Manx Online Trading – which operates the websites iMarkets.co.il and options.co.il – for her 0.5 million NIS losses ($139,309).

According to the report, the plaintiff claimed that she wanted to invest money which she and her husband had saved following the sale of their small grocery shop. She became aware of binary options in June 2015 because adverts kept appearing up on her computer screen.

She phoned the company to make initial inquiries, and thus met with a sales representative named Eden Mor. Mor presented himself as sympathetic and understanding, even sharing details of his own life. She made it clear to Mor that she did not understand investing at all, and Mor assured her that she would be guided in her decisions and the profits and losses would be very small. They would only come out of her profit and not the original fund – and thus the plaintiff was persuaded to invest money.

She invested 30,000 NIS at first, and then another 500,000. According to her testimony, Mor or another company representatives would regularly contact her and tell her what actions to perform, and if she was not at the computer at that time she would take note and perform them later. She noted that her understanding of FX trading was and is zero.

One day in August she performed the actions as instructed and was then informed that all of her money had been lost. In a state of shock, she was informed by Mor that many customers had lost their money on that day, that he himself would have to attend a disciplinary hearing, and that her file would be sent to the company’s retrieval department.

She claims that she was manipulated.

The defense

Manx said in its defense that the customer was fully aware of the risks involved. It denies giving any investment advice. It claims that representatives actually prevented her from investing a further 1.3 million NIS, and action she took because she was unhappy with the returns.

The verdict

Judge Dania Keret Meir did not accept the plaintiff’s claims regarding the beginning of the relationship with Manx as she phoned Manx on her own initiative and it was her decision to invest her money in binary options.

Meir did accept that Manx gave investment advice in bad faith, which was a breach of the law because Manx is not licensed to give financial advice.

Regarding the losses, Meir said that the plaintiff was not exactly devoid of responsibility or agency: “The determination that the defendants gave advice regarding the execution of transactions does not change the fact that a plaintiff is a self-employed person who also managed a securities portfolio at a bank for a number of years. The plaintiff decided to withdraw the money from the bank and look for a higher yielding investment channel.”

Her final judgment was that blame be apportioned 40/60 in favor of the plaintiff. Manx must compensate her for 60 percent of her claim, or NIS 489,000.

2018-05-16T11:59:03+00:00 May 9th, 2018|Binary, Cryptocurrency, Financial, Fraud, Governments|
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