LeapRate Exclusive… LeapRate has learned that Israel financial regulator the Israel Securities Association (ISA) has handed out its first-ever fine to a Binary Options broker, for engaging in unregulated binary trades with Israeli clients.
The ISA has fined binary options broker DGI Market (operating from dgimarket.com) and its controlling shareholder Gabriel Lavie a total of NIS 500,000 (USD $130,000).
The bulk of the fine went to Gabriel Lavie personally, NIS 300,000, and he was banned from holding any position in a regulated financial concern for two years. DGI Market was fined the remaining NIS 200,000.
DGI Market had previously been the subject of a warning by Canadian regulator BCSC, in July 2016, for taking on Canadian clients without a license.
Israel’s new Forex Law required all brokers (Forex, Binary Options) to apply for an ISA license by the beginning of 2016. Those brokers were allowed to continue engaging in business with Israeli clients until their license was received, or until they were formally rejected. Of the 21 license applications initially received, only 6 Israeli Forex Dealer licenses have been granted to date, the latest to Colmex, as was exclusively reported at the time by LeapRate.
Apparently DGI Market did not apply for its license by the ISA mandated deadline, and continued doing business with Israeli clients.
According to authorities, DGI Market was doing about $2.5 million a month in Revenues on about 450 client transaction per month with Israeli clients between December 2014 and February 2016.
In March 2016, the ISA decided to ban altogether binary options trading by Israeli clients, and as such the license applications by binary options brokers were summarily rejected. The ISA is now considering action to also disallow Israel-based brokers from providing binary options trading services to retail clients abroad.
The ISA, in coordination with Israeli police, recently raided the offices of Retail Forex broker iTrader, and took its CEO and key employees in for questioning.