The U.S. Securities and Exchange Commission (SEC) has filed fraud charges against two individuals for an alleged $50 million binary options scheme they operated from Israel.
According to the SEC, Ronn BenHarav and Jonathan Mimun ran a boiler room that promised investors returns of 25% or more. However, the fact is that the investors were deceived and they lost all their funds in the investment rigged against them.
The defendants ran a fraudulent scheme
The SEC filed the allegations in a civil complaint in Federal Court, Nevada, on July 12. According to the complaint, Mr. Minun is the defendant. He co-owned the supposed Israeli trading company known as Porter Brokers. His accomplice, Mr. BenHarav, is a U.S. citizen based in Israel.
The SEC noted that the two accused anchored the scheme, which ran between December 2014 and June 2017.
A binary option presents two possible outcomes for the traders or stakers, where they receive a predetermined amount if their prediction about a stock is correct. However, they forfeit their stake if their prediction on the particular stock is wrong.
The Porter brokers set the bet on the prices of common shares of many firms that traded on the U.S. exchanges, such as Coca-Cola Corp, ExxonMobil Corp, IBM Corp, and Apple Inc.
Investors lost thousands of dollars
According to the filing by the SEC, the defendants defrauded both retirees and other real investors by selling the high-risk securities. But the investors were meant to believe that they were engaged in binary options trades.
The fraudulent company was called ‘JMRB Media, Ltd,’ and their employees did not disclose their real names and location. The SEC noted that they hid several details about the companies to deceive the investors and evade detection and prosecution.
The SEC also stated that the defendants set up a “win button” that allegedly wins trades for investors when it is activated. All these methods, according to the regulator, are dubious ways to steal investors’ funds.
Most of the investors who staked funds in the scheme lost their money, and many of them lost thousands of dollars in the process, the SEC alleges.