Israel business newspaper Globes is reporting that two former Binary Options salespeople who worked in one of the (many) call centers the industry had until recently in Israel are suing their former employer. The two, referred to only by Globes as “N” and “R”, were fired from their high-paying jobs last month as their employer relocated to Georgia without paying them their salaries and severance, according to the lawsuit.
The suit was brought against a company called G.M. Media Software Solutions, which engaged in marketing and trading in binary options owned by Israeli national Nadav Gover. The suit indicated that the two complainants, both in their mid-20s, had pre-tax salaries in the range of NIS 45,000-63,000 per month (or about USD $12,000-17,000 monthly).
The high salaries were thanks to large sales commissions the two earned. The company apparently employed at least 10 other salespeople like “N” and “R”, who brought in tens of millions of dollars annually in deposits.
But then, the party was over.
As Israeli regulatory authorities prepared legislation to ban selling Binary Options to clients abroad, G.M. Media Software Solutions abruptly closed its call center in Israel and moved to Georgia. G.M.’s move is actually one we’ve reported on for several companies, either shutting altogether or moving to locations such as Georgia, Bulgaria, Romania, and Cyprus.
“N” and “R” lost their jobs overnight and the company, the two former complainants claim, did not honor their employees’ severance rights.
In the NIS 500,000 (USD $138,000) lawsuit filed on behalf of “N” and “R” in the Tel Aviv District Labor Court by Advocate Hanoch Ehrlich, “N” and “R” are asking for salary, severance pay, and payment for lack of notice as required by Israeli law.
The lawsuit also sheds some light on the operations of Binary Options call centers, and the lure of easy money for young, inexperienced, but hungry employees.
“N” worked at G.M. Media for just 16 months, from November 2015 until February 2017. When he began working at G.M. he received a basic monthly salary of just NIS 7,000 (USD $1,900) and bonuses based on sales: 4% of monthly sales (i.e. client deposits) up to $50,000, 7% of monthly sales up to $130,000 and 8% of sales above that mark.
According to “N”, G.M. owner Nadav Gover would frequently tell employees that, “you aren’t here for your basic salary.” It was clearly communicated to “N” and “R” that their compensation would grow according to results – how much money they could get customers to deposit.
Both “N” and “R” note in their lawsuit that the revenue that they generated for G.M. was just a small part of overall revenue, with 10 other sales employees working alongside them. According to the lawsuit,
A crude calculation of G.M. Media’s revenue shows annual revenue of tens of millions of dollars annually. This fact makes the circumstances of their dismissal and the refusal of the defendants to fully pay up all the more outrageous.
With a number of Binary Options brokers in Israel similarly shutting their doors or moving abroad, we would expect more such litigation to emerge against other operators.