The U.S. Securities and Exchange Commission (SEC) has taken legal action against three foreign individuals involved in a fraudulent binary options scheme that caused U.S. investors, including vulnerable retirees, to lose tens of millions of dollars. The individuals charged are:
- Gil Beserglik (Israeli national residing in Germany)
- Raz Beserglik (Israeli national, head of Israeli boiler rooms)
- Kai Christian Petersen (German national, head of German boiler rooms)
SEC’s Ongoing Crackdown on Investment Fraud
According to the SEC complaint, the fraudsters operated a deceptive binary options scheme, using SpotOption as their trading software provider. The perpetrators aggressively targeted U.S. and foreign investors through a network of fraudulent online brokers, namely:
- Bloombex Options
- Morton Finance
- Starling Capital
These entities were part of the GreyMountain Management (GMM) scam network, orchestrated by Israeli fraudsters David Cartu and Uri Katz. Until at least 2016, GMM reportedly worked closely with WireCard UK & Ireland, raising further concerns about payment processing facilitation for fraudulent schemes.
SEC Enforcement Division official Melissa Hodgman reaffirmed the agency’s commitment to protecting investors, stating that this action reflects the SEC’s ongoing efforts to hold accountable those who exploit retirees and other vulnerable individuals—even when the fraud is perpetrated from abroad.
How the Scam Worked
According to the SEC, the perpetrators ran boiler rooms in Germany and Israel, where aggressive sales agents used high-pressure tactics to lure victims into binary options trading. These agents:
- Used fake identities and lied about their credentials to gain investors’ trust.
- Misrepresented the nature of binary options trading, falsely claiming that brokers only made money when investors profited.
- Persuaded victims to deposit large sums into trading accounts, many of whom were retirees.
- Refused withdrawal requests, trapping investors in the fraudulent scheme.
The Forex Peace Army (FPA) Traders Court had previously flagged Bloombex Options and the GMM network as scams, and multiple financial regulators in Canada, Australia, and Europe issued warnings about these fraudulent operations.
Devastating Investor Losses
Most investors who participated in these binary options schemes lost money, with some retirees losing their entire life savings—amounting to hundreds of thousands of dollars. The brokers profited exclusively from investor losses, giving them no incentive to offer fair trading conditions or legitimate investment advice.
Additionally, they ignored withdrawal requests, ensuring that victims had no access to their funds once they were deposited.
SEC’s Global Fraud Enforcement Efforts
This case marks yet another instance of the SEC cracking down on international financial fraud, particularly scams that drain the savings of unsuspecting investors. The legal action taken against Beserglik, Petersen, and their associates sends a strong message:
Cross-border fraud will not go unpunished, and regulatory bodies worldwide are ramping up their fight against boiler room scams and fraudulent trading schemes.