Tefek (Tel Aviv) 31664-11-22 State of Israel v. Gol Shorosh - part 5

Ms. Guy detailed the positive changes in Defendant 3's life since the offenses were committed, including employment continuity, recognition of a therapeutic need, and success in formulating his needs.  According to her, there is a risk that his chronic medical condition, imprisonment, will endanger his life.  She also noted that imprisonment could reinforce psychological injuries and intensify social stigma - which would harm the chances of rehabilitation after serving the sentence.  In light of the details, its recommendation is to impose on defendant 3 a punishment that will allow him to continue working, manage the bankruptcy process in which he is found and participate in the treatment.

21. In her testimony, Ms. Osnat Guy reiterated what was detailed in her opinion (D/5), stated that she examined defendant 3 for 3.5 hours, and that "these are personality traits that are very central to the matter of his physical illness... Dependent and immature personality traits, with a great need for protection and reliance on others." Her recommendation is to punish him in the community, so that he will not interrupt his employment and the treatment he is in, which in her opinion is "centrally and directly connected to the commission of the offense." In her cross-examination, she stated that she did not refer to the details of the Probation Service's report when she prepared the opinion, and did not think she should do so.  In addition, she does not know when Defendant 3 began to recognize his patterns, but he refers to the offenses he committed as "something that characterizes him for many years." In her opinion, there is " courage and honesty in his confession, which is very significant."

Summary of the accuser's arguments for punishment

22. Counsel for the accuser referred to the circumstances of the commission of the offenses, to the protected values that were harmed by their commission, and petitioned for the determination of a single penalty area for the charges of the indictment as an incident. According to him, in this case, the protected values were violated by serious offenses, while emphasizing that the defendants concealed the inherent conflict of interest between them and the customers of the trading arena, which in any case is full of risks for the investor, and fraudulently raised the clients' money while presenting false representations.  According to him, the defendants acted in a money operation and planning, their intention in establishing the arena and the operation was to cause the investors to lose their money, and there was no real trading in the arena, which did not hold a license under the law and did not have a bank account, and this is a fictitious arena.  In addition, he referred to the fact that the defendants interfered in trading when certain customers were destined to make a profit.  In response to the arguments of counsel for defendants 1 and 2 regarding the fact that the offenses in the first and second charges are regulatory offenses, he referred to section 53B of the Securities Law, which indicates that alongside the offenses, there is also a criminal sanction.
23. According to him, Defendant 1's part in the commission of the offenses is the greatest, he is the one who established and operated the merchant's arena , opened accounts for customers, deposited money, recruited Defendant 2 who recruited Defendant 3 in order to recruit customers, and the fraudulent amounts are attributed to him in full. With regard to defendants 2-3, he stated that they were the ones who recruited the customers, conducted the trade, and coordinated with defendant 1 to interfere in trading when it occurred.  He also noted that defendant 3 received the commissions due to him from his actions from defendants 1-2.  According to counsel for the accuser, the characteristics of the commission of the offenses in the case of defendants 2-3 are similar, the amounts of the offense attributed to them are similar, and their interference in commerce was to a similar extent.  However, there is a difference between them.  Defendant 2's share is larger than that of Defendant 3 but smaller than that of Defendant 1 - he was aware of the prior planning of the construction of the arena, and was entitled to higher commissions than those of Defendant 3, whose fees he paid himself.  Regarding Defendant 3, he claimed that his location was the lowest in the ranking.  This is because he is not charged with the offense of running the scene and he was not involved in the third charge.  Counsel for the accuser also referred to the fact that in a short period of time the defendants raised ILS 300,000 from a number of clients, and noted potential damage alongside the acts, also in light of the marketing of the arena to thousands.
24. In the overall circumstances, while appealing to the ruling, he petitioned for the determination of the following punishment ranges in relation to the actual prison sentence: Defendant 1 - 22 to 28 months in prison; Defendant 2 - 16 to 24 months in prison; Defendant 3 - 12 to 20 months in prison. Counsel for the accuser referred to the fact that the defendants admitted and took responsibility for their actions, and argued that this matter was considered in the arrangement reached by the parties, and that there was no room for further leniency in respect of it.  He also noted that defendants 1 and 2 had a criminal record, and defendant 3 had no previous convictions.  He also referred to the Probation Service's report on each of the defendants and emphasized that the court's considerations are broader than those of the Probation Service.  He also noted the importance of deterrence, including deterring the public from the offenses in question.
25. In the case of defendant 1, he noted that his report was positive and detailed the rehabilitation process in which he participated. According to him, in these circumstances and taking into account his criminal record, his sentence should be placed in the lower third of the punishment range, so that he will stand at 24 months in prison.  In the case of Defendant 2, he referred to the fact that the report was not positive and recommended a concrete punishment that sets a boundary.  According to him, there is no justification for deviating from this recommendation, and in light of his criminal record, his sentence should be set at the upper limit of the punishment range and he should be sentenced to 21 months in prison.  In the case of defendant 3 as well, he referred to the fact that the report was not positive and recommended a concrete punishment that sets a boundary, taking into account his son's health and health condition, and argued that deterrence considerations should be preferred over rehabilitation considerations.  According to him, Ms. Guy's opinion does not justify a deviation from the Probation Service's recommendation.  Regarding Dr.  Lubin's opinion, he claimed that the IPS is prepared to deal with complex medical conditions, and referred to rulings.  In addition, he referred to the fact that Dr.  Lubin did not examine Defendant 3 but relied on documents relevant to the end of 2022.  In the circumstances, he petitioned to place the sentence of defendant 3 in the upper third of the punishment compound, at 18 months in prison.
26. In addition to the actual prison sentences, counsel for the accuser petitioned for the imposition of a suspended sentence at the court's discretion and fines of ILS 100,000 for defendant 1, and ILS 50,000 for each of defendants 2-3, along with imprisonment in lieu of an appropriate fine. In a statement submitted after the plea for punishment, counsel for the accuser requested that the sum deposited in the court's coffers by defendants 1 and 2 be transferred to the pleas for punishment (in the sum of ILS 13,400 each for the benefit of the victims of the offense) to be channeled in favor of the fine that would be imposed.  Counsel for the defendants did not object to the wanted man.

Summary of the arguments of counsel for defendant 1 for the sentence

27. Counsel for defendant 1 argued that the most significant charge in the indictment was the second charge, and without it, it is reasonable to assume that the case would have been closed in the administrative enforcement track. In addition, they referred to the fact that the second charge was significantly amended in the framework of the plea bargain, according to them, in a manner consistent with the defense's argument that in most cases the defendants did not interfere in the clients' trading activities, and that loss or profit resulted from the trading activities they performed.  In this context, they argued that the scope of the theft by hand while interfering in commerce was reduced from a total of ILS 350,000 in the original indictment to ILS 40,000 in the amended indictment, and that most of the sum deposited by defendants 1 and 2 in the court's coffers is transferred to the plea hearing for the sentence.  We also referred to the fact that the scope of the fraud was reduced from a total of ILS 350,000 in the original indictment to ILS 300,000 in the amended indictment, and although there is no dispute that the customers decided to trade in the arena due to the false representations, in most cases there was no interference in such trading.  They also emphasized that the second indictment period is limited, lasting only a few months, and that the activity was stopped at the initiative of the defendants.
28. According to them, the offenses were committed by defendant 1 against the background of financial difficulty during the period in which he held faulty thought patterns, but there is no dispute that there were costs alongside the establishment and operation of the arena and the system. They also claim that defendant 1 lost money as a result of the activity, encountered financial difficulties and debts of over ILS 270,000, and is currently in insolvency proceedings.  According to them, defendant 1 does not generate income and pays a monthly sum of ILS 4,000 to the pension fund, his wife earns a monthly sum of about ILS 5,000, and despite his financial situation, he paid his share of the compensation with the help of his parents as agreed.
29. Counsel for defendant 1 referred to the report and claimed that defendant 1 had undergone significant rehabilitation, which began even before the indictment was filed in a private setting, and for the past three and a half years he has been participating in treatment at the Argaman Institute as part of the probation service, and is now "in a completely different place". They also emphasized the Probation Service's impression of Defendant 1's sincere remorse, his assumption of responsibility, the empathy he showed towards the complainants, and his authentic recognition of the wrongdoing of his actions and the damage he caused.  In this context, they even quoted the sentence of defendant 1 in the previous case, where it was noted that significant weight was given to the therapeutic process that he underwent when deciding to place his sentence at the bottom of the punishment range.  According to them, since this is a real rehabilitation and not just a potential one, it is correct to adopt the recommendation of the Probation Service and impose a prison sentence on the defendant by way of community service alongside a conditional sentence, while referring to the ruling.
30. In addition, we referred to the personal circumstances of Defendant 1, a married father of two minors who has been being treated for the past two years following a family tragedy. They also noted that defendant 1 worked for about 15 years as a janitor in a hospital, but lost his job and is currently unemployed and in insolvency proceedings.  Counsel for defendant 1 argued that the conviction of defendant 1 in the previous case was irrelevant, and also referred to the passage of time, more than six years from the date of the commission of the offenses in the first and second charges, and the fact that the defendant's assumption of responsibility at the beginning of the proceeding led to a saving of judicial time and the testimony of witnesses, including victims of the offense.
31. Referring to the case law and distinguishing between the accuser's ruling and our case, they petitioned for the determination of a punishment range of 6 to 9 months imprisonment by way of community service, and that the sentence of defendant 1 would be placed at the bottom of the compound. Alternatively, and to the extent that a different punishment area is determined, they argued that it is appropriate to deviate from the appropriate punishment range for rehabilitation considerations, and in order not to harm defendant 1 and his family.

Summary of the arguments of counsel for defendant 2 for the sentence

32. Counsel for defendant 2 argued that the first and third charges (inadvertently recorded in the second transcript) are regulatory in nature, and that administrative enforcement should be taken for them by way of a financial sanction, so that the penalty area should remain at the level of the fine only for the acts. According to him, the second charge was that led to the filing of the indictment due to the manner in which the clients were recruited, using fraud, but according to him, weight should be given to the fact that the duration of the offenses committed in this indictment is short, the number of clients is small and stands at 20, and the funds raised are only ILS 300,000.  It was emphasized that as the accuser pointed out, defendant 1 was the brainchild of the idea and defendant 2 assisted him in the operation, but he was not the owner of the scene.  It was also argued that with the exception of a single case, the defendants did not intervene in trading in order for customers to lose their investment, and this is a small amount, and the misappropriation of the clients' money amounts to a total of ILS 40,000, of which only ILS 20,000 is attributed to defendant 2 together with defendant 1.  According to him, it is not for nothing that there are no complaints in this case.
33. He further argues that while referring to case law, in the circumstances, after weighing the amount of damage, the duration of the offenses, the number of clients, and the fact that the main part of the indictment deals with conduct for which administrative enforcement is sufficient - the penalty compound must be determined between a suspended prison sentence and up to a few months in prison to be served with community service.
34. In connection with the location of Defendant 2 within the boundaries of the punishment compound, he referred to the personal circumstances of Defendant 2, his confession at an early stage of the proceeding as part of a mediation proceeding, and to the saving of judicial time. In addition, the fact that defendant 2 deposited the sum of ILS 13,400 for the benefit of the victims of the offense is transferred to the plea for punishment.  He further argued that defendant 2's criminal record did not justify a harsher sentence, given that it was a "dispute regarding custody and removal of children" and that he was punished for his actions.  According to him, defendant 2 is a normative person, suffering mentally (D/10) and the harm that will be caused to him by the sentence that will be imposed must be taken into account.  He further argues that defendant 2 should not be harshly treated because of the details in his report, and a sentence of imprisonment with community service or conditional imprisonment is sufficient in order to set a limit on him.  His petition is that Defendant 2 be sentenced to a suspended sentence, a lower fine than that to which the accuser petitioned and undertaking, in which case the fine must be a maximum of ILS 30,000, and a lower fine should be set at that.  According to him, if a prison sentence is necessary, a prison sentence to be served with community service should suffice, while also referring to the overcrowding and overcrowding in the prison facilities.

Summary of the arguments of counsel for defendant 3 for the sentence

35. Counsel for defendant 3 referred to the facts of the indictment and argued that defendant 3's share was very limited, over a short period of about 4 months. In this context, she noted that defendant 3 was recruited for the purpose of marketing the arena, was not a full partner with defendants 1 and 2, received commissions in the amount of 22.5% of the amount of his clients' deposits, and the rest of the funds were divided between defendants 1 and 2, and that he was not involved in the third charge.  She also noted that Defendant 3's share in the recruitment amounted to ILS 150,000, out of six of the eight clients he contacted.  In addition, she referred to the significant amendment in the original indictment, and to the fact that Defendant 3 was not involved in the presentation of all but two of the misrepresentations.  She also emphasized that it appears that at first defendant 3 believed that the arena was operating under a license.  In addition, she claimed that the false representation presented by defendant 3 that the arena has experience is the type of exaggeration that "every person who sells his wares" is employed.
36. According to her, while referring to the case law, in circumstances whereby defendant 3 did not take part in the false representation that concealed the conflict of interest of the arena, which is the main misrepresentation, was not the owner or partner of the revenues and did not take part in the planning that preceded the commission of the offenses, and in light of his distress and the reasons that led him to commit the offenses, the penalty compound should be determined at the bottom for community service. After arguing for the sentence, in a request to "provide clarification and amend the protocol," she argued, while referring to the ruling, that the punishment compound "can and will insist on punishment that is not the way of imprisonment, and especially the punishment of serving hours for the benefit of the public." In this context, she also argued that if Defendant 3 is sentenced to an actual prison sentence, it may exceed the duration of the offenses committed by him, and is therefore disproportionate.
37. As to the location of the defendant within the boundaries of the punishment compound, counsel for defendant 3 referred to the fact that defendant 3 had no criminal record, his confession and his full cooperation in his interrogation, the saving of judicial time alongside the confession andthe passage of time. In addition, it referred to the personal circumstances of defendant 3, including his medical condition.  According to her, defendant 3 is "in a very unique and complex and very difficult physiological state of health", and is left with an injury that affects his life on a daily basis, suffers from many problems, some of which require prolonged treatments, and is constantly on the verge of aggravation, and if he is not treated properly, he will be in mortal danger.  In her arguments, she referred to the opinion and testimony of Dr.  Lubin (D/3), the IPS position in D/4, and the opinion of Ms. Guy (D/5) and her testimony, to the personal and family history of Defendant 3 and the complexity of his circumstances, and argued that in his medical condition, medical treatment provided by the IPS is not sufficient to ensure his health.  She added that if it is determined that Defendant 3 must serve a certain period of imprisonment, he should be referred under the circumstances to a detention facility where proper treatment is provided, including meetings with a psychologist.
38. In addition, she referred to the complex situation of defendant 3's minor son (D/2), who needs his father, as well as the difficulty in defendant 3's marital relationship with his wife. According to her: "If the defendant is given too severe a punishment, he is liable to lose the marital relationship..." and lose contact with his children, and this will constitute "a harsh and heavy punishment and a disaster for him and his children, who will suffer from his absence."
39. According to her, defendant 3 is even undergoing a rehabilitation process and has begun family therapy within the framework of the "Mechal" institute. In this context, she again referred to Ms. Guy's opinion, where it was written that defendant 3 understood and internalized his actions.  According to her, the report also noted that defendant 3 was at the beginning of the process of assuming responsibility, while noting that he was distancing himself from activity related to the capital market.  In addition, she referred to the fact that in Ms. Guy's opinion it was noted that even in the current workplace, Defendant 3 distances himself from anyone who could adversely influence him, and he is happy that the place is networked with cameras.  The alternative petition of counsel for defendant 3 is that he should be excluded from the punishment compound due to defendant 3's special medical condition and his efforts to rehabilitate.  Referring to the ruling and the proposal for Amendment 128 to the Penal Law - which passed its first reading in the Knesset, she asked that a disciplinary order be issued in his case, since another punishment would lead to a violation of the principle of proportionality.  As to the financial situation of defendant 3, she referred to the insolvency proceeding in his case (D/11).

Statement of the Defendants

40. Defendant 1 asked to testify at the beginning of the plea bargain and stated that the cost of setting up the arena was about ILS 100,000 and that he had taken out a loan for this purpose, and that the monthly cost was between ILS 4,000 and ILS 5,000. In addition, he shared that about two years ago, his wife's only brother and the only uncle to his children was accidentally murdered, and noted the difficulty and complexity of coping.  He also stated that his financial situation is difficult, he is unemployed, is in insolvency proceedings and pays a total of ILS 4,000 a month.  In addition, he said that he participated in the treatment, and now understands and regrets his actions and the harm he caused.  In his remarks at the end of the hearing, he stated that the individual sessions as part of the treatment he underwent dealt with the field of fraud, and that he had agreed to also join a therapeutic group in the field of fraud, but the Probation Service believed that this was not necessary.  His request is that I take him into account so that he can continue his self-and family rehabilitation and take care of his children and wife.
41. Defendant 2 stated that he took responsibility for his actions and claimed: "At first I didn't want this to happen, and I told Jewel about it and I didn't initiate it. Joel is a good guy, and we're neither criminals nor criminals, and I came from a family and I'm a third-generation Holocaust survivor.  Oppressing people is the most disgusting thing that can be." According to him, the publications about the process "have ruined my life" and he cannot find a job.  He also said that he donated 20,000 shekels to soldiers following the war.  Defendant 2 stated that he would not break the law again, he wanted to support his children and pay his debts, and he was sorry and took responsibility if he harmed others.  He said: "I was the best father I could be and I live on tranquilizers today."
42. Defendant 3 apologized for the damage he had caused and stated that he regretted his actions and took responsibility. According to him, during the time the offenses were committed, he acted out of improper considerations, and today he is a father of children, with a complex health condition, and wishes to set an example for them.  He added , "I am in a process of rehabilitation, both couple, and privately, in order to solve the problems and patterns of behavior that have not returned since then, and six years have passed, and I promise that they will not return," and he wants to rehabilitate his family.

The appropriate punishment area

43. The appropriate punishment range is determined in accordance with the guiding principle of punishment, i.e., the existence of an appropriate relationship between the severity of the offense in its circumstances and the degree of guilt of the accused, and the type and degree of punishment imposed on him, taking into account the social value that was harmed, the extent of the offense, the circumstances related to the commission of the offense and the customary sentencing policy.
44. In our case, after examining the facts of the charges in the close connection test, as the accuser's petition and since the defense attorneys did not argue otherwise, one penalty area will be determined for all the offenses (Criminal Appeal 4910/13 Bnei Jaber v. the State of Israel (October 29, 2014) (hereinafter: the Jaber Rule)).  It is clear that when determining the punishment range for each of the defendants, his concrete acts and the offenses he was convicted of committing will be examined, and as is already known, and as determined in the Jaber Rule and in Criminal Appeal 6888/17 Shirazi v.  the State of Israel (December 10, 2018) - the classification of events is intended for a functional purpose as an auxiliary tool, and in any case, on the substantive level, it is incumbent upon the court that determines the punishment area to consider the number and severity of the acts, even when they were classified as a single criminal event.  It was also held that where the court sentences a total sentence rather than a separate sentence for each incident, the importance of the number of incidents for sentencing is less (Criminal Appeal 2454/18 Sheinberg v.  State of Israel (December 5, 2018), para.  20).
45. The defendants were convicted of a series of economic offenses, including running a trading arena without a license, and multiple offenses of offering to trade in an unlicensed trading arena. In addition, there are multiple offenses of fraudulent receipt and the offense of theft by sending a hand by an authorized person - each according to his share.  These offenses are intended to protect important social values relating to the freedom of will, freedom of action and freedom of choice of the deceitful, in our case, the customers of the merchant arena, and their ability to make informed and correct decisions, as well as their property interest.  In their actions, the defendants even damaged the trust between the investing public and those who are entrusted with their money.  As Justice Procaccia said inAdditional Criminal Hearing 2334/09 Peri v.  State of Israel (May 23, 2011), para.  60:

"The social value protected in the offense of theft focuses on protecting the property interest of the owner of the right to the property.  In offenses of theft by hand and theft by an authorized person, the property interest is also joined by the value of protecting the special relationship of trust between the depositor of the property and the receiver, which is required to fulfill certain conditions in relation to the deposit given to him.  Thus, in these offenses, "two protected interests that stand on the same level join each other, namely the protection of property and the protection of the relationship of trust" (Bein, at p.  347)."

46. As detailed in the explanatory notes to the proposed Securities Law (Amendment - Trader's Arena for Own Account), 5770-2009, which was merged into the Securities Bill (Amendment No. 40) (Trader's Arena for His Own Account), 5770-2010 as Amendment 42 to the Securities Law, in advance, there is a potential for a built-in conflict of interest in the manner of trading activity in trading arenas. Hence also the importance of the legislation in Amendment 42 to the Securities Law in order to regulate the activity of trading arenas, and the obligation to license and provide information to customers who are at an informative disadvantage, and often even lack knowledge in the field and whose financial education is limited.  As noted in the bill on page 12:

"Due to the potential for a conflict of interest inherent in the way the trading arenas operate, there is concern that the manner in which customers are recruited and the trading in the arenas will be conducted unfairly, in the sense that investors in these arenas will not receive sufficient information for the purpose of making an informed investment decision, and that the trading rules in the arena will not provide adequate protection for traders in the arena.  In addition, since investors are required to deposit funds in advance with the Arena, these funds must be protected."

47. Admittedly, as the defendants' counsel noted, there are administrative enforcement measures for the commission of offenses relating to the management of a trading arena without a license and an offer to trade in an unlicensed arena - but as the accuser's counsel pointed out, according to section 53B of the Securities Law, there is also a criminal sanction, including a two-year prison sentence for the offenses. It should be clarified that I do not find it acceptable to accept the argument of the defense attorneys that where there is a possibility of imposing administrative enforcement measures for the commission of an offense, the penalty in a criminal proceeding for which must be imposed must be a monetary fine only (see and compare in the required changes the imposition of a ransom versus a criminal punishment for the same offense under the tax laws).  In addition, in our case, in any case, alongside these offenses, serious offenses of fraudulent receipt and theft by hand were committed, and the combination of circumstances indicates a considerable violation of the values protected from the acts, which differs in its degree in relation to each of the defendants.
48. Thus, in terms of the circumstances detailed in the indictment (and only these - when the arguments of the parties regarding additional circumstances that are not agreed upon and not detailed in the indictment are not among my considerations) it appears that this is the commission of offenses of offering to trade in an unauthorized arena, which were systematically committed by defendants 1 and 2 between 2017 and 2020, while referring customers to the Australian trading arenas Acy Markets and Feareston in exchange for commissions. For referring 16 clients to the Australian arena, Ace Marketsand Defendants 1 and 2 between January 2018 and 2020 received commissions in the amount of $36,255.  For referring clients to the Australian arena at Pepperstone between November 2018 and December 2020, defendants 1 and 2 received commissions in the amount of $32,355, which they shared, while defendant 1 transferred a small sum after working with them.
49. In addition to the aforesaid, Defendant 1 even established the TradePro trading arena during 2018, operated it without a license together with Defendant 2, and worked with Defendants 2 and 3 to market it. This was done by contacting at least 2,965 investors on 7 different occasions, while sending text messages and a landing page through the Mobi-Me company with which they contracted.  Defendant 1 was the one who signed the contract with Mobi-Me, while the engagement and conversation with Mobi-Me was carried out by Defendant 3 who also provided the mailing list and drafted the text message to be sent to the customers together with Defendant 2.  Marketing through Mobi-Me stopped only when Mobi-Me refused to continue doing so.  The defendants even acted to advertise on the Internet, by email, and by contacting customers directly.
50. It follows that defendants 1 and 2 acted to commit the offenses with planning and sophistication over a considerable period of time, and this is not a case of committing offenses over a short period of time only, as the defense attorneys claim. Defendant 3 joined the activities of Defendants 1 and 2 in the framework of TradePro from the end of April 2018 to August 2018, when he was fired.  Although he did not stop committing the offenses on his own initiative, the period of his commission of the offenses is indeed not prolonged.  Defendant 3 did not even take part in the establishment and management of the arena, and his inclusion in the activity stemmed from the desire of defendants 1 and 2 to contact the customers of the Real Forex company in which defendant 2 worked, and to persuade them to transfer their activity to Tradepro, and since defendant 2 could not act as aforesaid.
51. The basis of the offenses committed by the defendants was greed for money, and they even went so far as to make false and misleading representations to the clients for the purpose of recruiting them, with the additional severity of this. Thus, defendants 1 and 2 made false representations that TradePro operates under regulation in Israel and abroad; that TradePro has expertise and financial strength, and that the arena has been active for over 6 years and has 150 customers (even though in practice the number of its customers was less than 30 and it was established recently, and it had no offices or a bank account); In addition, they presented that TradePro is not the counterparty to the transaction and does not gain or lose from the profits or losses of the customers, while in fact it was the counterparty by virtue of being a trading arena; In addition, they concealed the ownership of Defendant 1 in the scene, the involvement of Defendant 2 in its management, and the fact that Defendants 2 and 3 are entitled to commissions for bringing clients that are received only if the investment funds were lost, thus concealing the inherent conflict of interest in their activity to recruit clients.
52. These are serious representations, which were made while taking advantage of the knowledge gaps with the customers, for whom the potential for damage is very high, especially given the actual marketing that the defendants used through MobiMe and themselves, as aforesaid. This is when there is an inherent danger to investors in trading arenas naturally, and hence the purpose of the regulation as aforesaid.  It cannot be ignored that the defendants have knowledge in the field of securities and the capital market, and this adds severity to their actions.
53. Defendant 3 was attributed only some of the representations, one relating to Tradepro's experience and expertise, and the other according to which Tradepro's activity is legal and licensed. In addition, it was noted that at first he believed that Tradepro's activity was supervised by the Supervisory Authority in Britain, but even when he realized that Tradepro was not supervised at all, he continued his activity.  It was further noted that all the defendants concealed the fact that Defendant 1 was the owner of the arena and that Defendant 2 was involved in its management.  Admittedly, defendant 3 was not convicted of making false representations regarding the trading conditions and bonuses, nor of concealing that he would be entitled to commissions only if the investment funds were lost.  However, the false representations that he presented are also serious in themselves, and his counsel's argument that the representation that the arena has experience is of the kind of exaggeration that "every person who sells his wares" is rejected, while it is clarified that a person who markets his goods is expected to be accurate in the data that he provides to potential customers, and thus he is obligated by law, and all the more so in relation to high-risk activity, as in our case.
54. The facts show that defendant 2 himself recruited about 10 clients who invested a total of ILS 150,000 on the basis of the false representations. Defendant 3 approached 8 clients and recruited 6 of them, who invested a total of ILS 150,000.  Defendant 3 sometimes received 22.5% of the amount of the customers' deposit that he raised from defendant 2 in cash, after the client lost his money.  The rest of the funds were divided into equal parts by defendants 1 and 2, including in relation to customers recruited by defendant 3.
55. Admittedly, the duration of the offenses committed in the framework of TradePro is relatively short, about 6 months in relation to defendants 1 and 2 and about 4 months in relation to defendant 3, the defendants stopped the activity of the arena themselves, and the scope of the offenses is also not high - which leads to a moderation of the circumstances to some extent (without ignoring the fact that in relation to the short period of activity, it cannot be said that these are negligible sums). However, the duration and scope of the offenses are not the be-all and end-all, and the severity of this case stems not only, not primarily, from the sums of the offenses or the duration of their commission, but from the planned and sophisticated fraudulent conduct of the defendants (see, in this context, for example, Criminal Appeal 6020/12 State of Israel v.  Eden (April 29, 2013), paragraph 25 of the judgment of Justice Barak-Erez in connection with the offense of using insider information: "The litigants before us sought to point out the relatively small volume of securities purchases that were made based on the use of insider information.  However, this is not a decisive consideration.  The wrongfulness of the conduct is not expressed only in the damage caused").
56. Additional severity in the defendants' actions also arises from the fact that in addition to the acts detailed above, the defendants interfered in the trading of some of the customers in order to make them lose their investment. This is without ignoring the fact that in this context the indictment was amended so that although the defendants were originally charged with interfering in trading in relation to the vast majority of the investment funds, at the end of the day they were convicted of interfering in trading in relation to only part of the investment funds, and of misappropriating customer funds in the following amounts: defendant 1 in the sum of ILS 40,000, and defendants 2 and 3 together with him in the sum of ILS 20,000 each (instead of ILS 350,000 in the original indictment).  It is true that the amount of the offense is relatively low in order to mitigate the degree of harm caused by the act to the protected values, but this does not negate it.  Defendants 1 and 2 were also convicted of using part of the investors' funds for private purposes.
57. When determining the punishment compounds, I considered the relative share of each of the defendants. Indeed, according to the facts of the indictment, defendant 1's share is the largest.  Defendant 1 established and managed TradePro without a license together with Defendant 2, concealed from clients that he is the manager of the arena, made false and misleading representations, and interfered in trading in the arena in order for some of the clients to lose their investment.  Defendant 1 was convicted of sending money to customers in the amount of ILS 40,000, as opposed to defendants 2 and 3, for whom the amount of the offense in this context amounted to ILS 20,000.  In addition, he worked to market the Australian merchant arenas even though they were not supervised in Israel and in violation of the law.  For his activity in connection with Acy Market together with Defendant 2, he made a profit of $36,255.  For his activity with Defendant 2 in connection with Pepperstone, he made a profit in the amount of $32,355, which he shared with Defendant 2 and with another, to whom a small sum was paid.  From the point of view of the overall actions of defendant 1, it appears that his actions were planned and sophisticated, and I do not find any relevance or reason to take into account his alleged expenses in setting up the arena, which is in essence the means of committing the offenses by him.  Accordingly, I also do not find any relevance to the fact thatat the end of the day the activity in the arena was a loss.
58. The share of Defendant 2 is also not canceled, but it is somewhat smaller than the share of Defendant 1. This is in light of the fact that Defendant 2 acted together with Defendant 1 in a planned and sophisticated manner, and was a partner in the establishment, management and operation of Tradepro, as well as in the marketing activities of the Australian merchant arenas Acy Market and Preston, while generating profits.  Defendant 2 also acted to present the false representations as part of his activity at Tradepro, engaged in marketing and recruited about 10 clients who invested a total of ILS 150,000.  In addition, he interfered in the trading of some of the clients as part of his activity in TradePro in order for them to lose their investment, and as aforesaid, he handled together with Defendant 1 in the sum of ILS 20,000 in client funds.  Defendant 2 even received higher commissions for his activity in TradePro than those received by Defendant 3, whose share was the smallest in the criminal category, and even acted to recruit Defendant 3 to TradePro in order to contact the clients of the Real Forex company in which he worked.  I did not find it necessary to give due weight to the statements of Defendant 2 to the Probation Service according to which he acted as he did, inter alia, because he believed that in this way Defendant 1 would be able to repay him a financial debt in the amount of several tens of thousands of shekels as a gifted reason.  These facts are not stated in the indictment, and on the face of it, it even appears that this is an attempt by defendant 2 to reduce his responsibility for his actions.
59. Defendant 3's role in the commission of the offenses is the smallest. This is the case with respect to the period during which he committed the offenses, the commissions he received, and the false representations he made.  Defendant 3 was not involved in the marketing of the Australian arenas, did not take part in the management and establishment of TradePro, and at the beginning of his activity he believed that the arena was supervised by the Supervisory Authority in the United Kingdom.  As part of his activity in the arena, he recruited 6 clients who invested a total of ILS 150,000.  Like Defendants 1 and 2, Defendant 3 interfered in the trading of some of the customers in order to make them lose their investment, and manipulated customer funds together with Defendant 1 in the amount of ILS 20,000, like Defendant 2.  Although I have not found sufficient weight to be given to his claim before the Probation Service that he felt exploited by Defendants 1-2, and also in his actions a severity that is not negligible in light of the activity of his false representations and his interference in commerce, the degree of harm to the values protected by his actions is considerably less than that caused by the actions of Defendants 1 and 2, and this will be reflected in the punishment that will be determined.  At the same time, it should be clarified that the argument of counsel for defendant 3 that the sentencing of a long sentence from the duration of the period of the commission of the offenses by him violates the principle of proportionality is rejected, and as is well known, there is no connection between the duration of the commission of an offense and the sentence accompanying it, and in many cases long prison sentences are issued for the commission of momentary offenses.
60. In the overall circumstances, my conclusion is that the actions of Defendant 1 led to a real violation of the protected values, as did the actions of Defendant 2, albeit to a lesser extent. The actions of defendant 3 are of a relatively low standard, but it is also not invalidated, given the circumstances and the acts he committed as detailed above.
61. As to the customary sentencing policy: it appears that there are no cases in which defendants have been convicted of committing offenses in connection with a trading arena as in our case, and therefore the relevant case law relates to economic offenses involving fraudulent receipt, theft by handwriting, and unlicensed activity in similar but not identical contexts. Before reviewing it, consideration should be given to the normative determinations of the Supreme Court regarding the severity of economic offenses and the importance of harsher punishment for their committal.  This is in light of the real harm to important social values from their implementation, for the purpose of deterrence, and in order to neutralize the incentive underlying them.  These determinations are also relevant when determining the scope of punishment in our case.  See, as one of the many examples, the words of Justice Elron in Criminal Appeal 1312/21 Greenfeld v.  State of Israel (August 2, 2022), paragraph 24:

"Economic offenses differ in their characteristics from 'regular' criminal offenses.  They are devoid of a violent component, in the physical sense, they are not expressed in harsh images from the scene of the incident or in the victims who require medical treatment.  The judges who hear these offenses are not presented with a report of the victim of the offense, and the victim of the offense and his family are not present, as a rule, in the courtroom.  Sometimes, the victims of the offense have no name and no face, and they do not even know how the offense caused them to lack money or caused them other damage.  In addition, more than once, the offenders who commit these offenses lived a normative life and economic well-being until the commission of the offense.