The witness, Mr. Shabbat Laurent: What is the fee? Thespread Between... Wait, wait, Google sells for $3? Okay. Just an example... The Stock, the Stockrate After all, it's actually trading on rate. Okay. What is it rate? It's basically ... The goal... That's right. We're actually selling it, right? Now for a lack of better words We will say that there was a purchase by the same customer who actually bought it atrate According to 3.50. The 3.50 made in the middle, the 3.50counter party He probably gave me a 3-so what do I have left in the middle? 50. It's thespread. Thespread It is between the price of thecounter party He gives me what is called a commission, of the opening fee, we will call it. And that's how it works. And if you've generated enough commissions for me then I've probably earned enough and the bonus should cover that..... Sorry this should cover the bonus. Thank you, ma'am.
The Honorable Judge Bibi: But you actually say the bonus because the money she has can actually use to leverage.
The witness, Mr. Shabbat Laurent: It can use it for leverage until it reaches a high enough trading volume that it has already returned my money, and then it's actually a conservation tactic. That's how you keep the customer in the system."
I am of the opinion that the manner in which Shabbat explained the receipt of the commission by Global - which is the spread between the investments of the two clients - indicates in itself the identity between Global and the arena. Otherwise, then on the face of it, Global was supposed to receive such a commission only from its customers' money or investments, or only in a case where both Global's customer and the market maker are Global's customers. However, the mechanism that Shabbat testified to shows that Global always receives a commission for the difference between the two clients' trades. This evidence indicates either that Global itself (or the arena in which the clients traded) made a market and therefore, Global could always receive the spread, or that both customers were always Global's and therefore, Global always received a commission in the form of the spread. In any case, the fact that Global received a commission in the form of the spread from the clients' counter-investments, is capable of incentivizing Global to lead its clients to carry out transactions on a considerable scale and not to withdraw their funds - since the higher the volume of activity of the customers - the higher Global's commission. In this state of affairs - insofar as Global does not make a market but only operates an arena in which its customers operate - Global is indifferent to the question of which of its customers will gain and which will lose, but this does not make its interests identical to those of its customers. This is because, in the long term, due to the existence of a spread that is deducted or transferred to Global, it will always make a profit, while its customers will always lose the gap embodied in the spread. In light of this, all Global should aspire to is that customers will continue to invest and not withdraw their money. This is in contrast to the customers, who are at a disadvantage in it, the more they invest, the greater the risk of losing their money, and moreover, at the end of the day, they will be at a loss as there will always be a spread that will be deducted in favor of Global. The conflicting interest will apply even more intensely as Global has made a market - and I am not exactly determining whether this is indeed the case - in which case, its interest is that the customers will even lose because it is the one who gains/wins their losses.
- Global's conflicting interests vis-à-vis its customers also have implications for the manner in which Global's employees are compensated (and as a result, the employees' incentive to make false representations to customers in order to persuade them to make high-rate deposits and not withdraw their money) - remuneration that promotes Global's interests vis-à-vis the interests of the customers. In this regard, the plaintiff presented an agreement of another employee who worked at Global (this agreement was disclosed in the framework of a labor court proceeding between the employee and Global, and its content is not in dispute, since Global itself claimed in the proceeding there for such working conditions with the employee). As part of this agreement, it was determined that the employee would be entitled to pay a monthly commission for net deposits - which are deposits of the customers minus withdrawals made by them. In addition, the employees were compensated for the turnover and it was agreed that the employees would be given commissions according to retention targets in accordance with proper withdrawal lists. As for Avisror's employment agreement, he claimed that he could not find his employment agreement at Global. At the same time, Avisror did not present an exact detail of the alternative manner in which the commissions were calculated in order to determine his salary, and claimed only that the customers knew that he was receiving commissions, since he was an employee of a commercial company, and he also testified on page 16 of his affidavit:
"Among other things, I was also rewarded on the basis of achievements. Thus, I received commissions from actions taken by the clients I handled. I even clarified this to the clients. Thus, among other things, I was rewarded on the basis that the clients deposited funds into their trading account, continued to perform various trading operations, on the basis of customer retention, etc. Accordingly, I have encouraged my clients to carry out various trading operations. As stated, in my understanding, for this purpose they contracted with one of the companies in the first place. In my understanding, I would have even sinned in my job if I had not presented the clients with possible trading channels. In any case, I will clarify that naturally, I had no ability to predict in advance whether a particular trade would end in profit or loss for the client, and my reward mechanism did not depend on that.