On October 9, 2019, the U.S. Securities and Exchange Commission (SEC) filed charges against two Israeli nationals, Anton Senderov (35) and Lior Babazara, also known as Lior Bar (38), for orchestrating a fraudulent scheme that impacted over 2,800 American investors and resulted in losses exceeding $5 million. The scam was carried out through two binary options platforms, LBinary and Ivory Option. Operating out of Israel via their company, LianTech Finance Marketing Ltd., they ran a boiler room where agents misrepresented their credentials and falsely claimed that brokers only profited when clients earned returns. In reality, most investors ended up losing money, with some seeing their entire savings wiped out.
On August 27, 2020, Judge Rosanna Malouf Peterson of the U.S. District Court for the Eastern District of Washington approved a final consent judgment. As reported by FinanceFeeds, Babazara and Senderov were held jointly and severally responsible for repaying $560,773, which included ill-gotten gains and pre-judgment interest. In addition, each was fined a civil penalty of $350,000. The judgment also permanently bars them from marketing or selling binary options and from engaging in deceptive or manipulative practices.
Following the widespread prohibition of binary options in many countries, authorities and courts have intensified efforts to dismantle the fraudulent ecosystem, much of which originated in Tel Aviv, Israel. In Austria, during the Vienna Cybercrime Trials, Israeli citizen Gal Barak is being prosecuted for allegedly running a network of binary options scams and boiler rooms. He faces charges of investment fraud and money laundering.
In another U.S. case, Israeli national Lee Elbaz, who served as CEO of the boiler room firm Yukom Communications Ltd., received a 22-year prison sentence and was ordered to pay $28 million in restitution.