The United States Securities and Exchange Commission (SEC) has filed charges against two individuals in an ongoing case related to binary options fraud. Jonathan Mimun and Ronn BenHarav, who are based in Israel, are the two named by the SEC in the charges for using fraudulent methods to convince US traders to invest in binary options.
Mimun and BenHarav managed to accumulate millions of dollars in investments using their company name, ‘JMRB Media Ltd.’ Through this company, they utilized high-pressure sales tactics to sell high-risk binary options to potential investors. In addition, they also used two other brand names, ‘Dalton Finance’ and ‘Porter Finance’, in an attempt to add legitimacy to the company.
The SEC has alleged that the company and its employees lied to potential investors about several different aspects when carrying out their sales tactics. False names, false credentials and misleading information about the nature of the investments were all used to convince investors to deposit their money with the firm.
Moreover, it has been alleged that the salespeople would inform potential investors that the only time the broker made any money was when the investor made money. This technique was used to gain additional trust for the trading information that the brokers were providing.
Once the investors believed that the brokers only made a profit when they did, they invested their money following the company recommendations. However, in reality, the brokers made money when the investors lost money and the company invested in options that were more likely to return a loss to the investor.
Binary options are a high-risk trading option dependent upon if a condition does or doesn’t meet a certain requirement. This is usually applied to the value of an asset, which will then have to be either above or below the set value when the option time runs out.
Mimun and BenHarav ensured that all of the salespeople they used pushed options that were unlikely to make money for the investor. The company also developed a button that created the appearance of a number of winning trades. They then used this to solicit further funds from their investors.
The SEC has claimed that the majority of investors with the company lost money, with some individual investors losing hundreds of thousands of dollars.
Federal charges have been filed in Nevada, with the SEC looking for fraud charges to be made, broker-dealer registration charges and the return of funds to any investors who were misled.
Last month, LeapRate reported that the watchdog settled charges against CEO John Wise and his company Loci Inc. following accusations that the entity had made materially misleading and false statements regarding a sale and offer of digital asset securities that were later found to be unregistered.
Having gained a degree in economics, Alan entered the world of financial services starting his career in London and then moving to New York for a number of years. His first post at a City bank saw him establish a reputation as an forex trader. Having recently returned from New York after eight successful years, Alan is now a prosperous trader in his own right concentrating on commodities and forex.