Representation regarding the legality of the activity
- This representation focuses on the fact that the defendant concealed from his clients that he did not hold a management license, and that the activity in their accounts requires a license and is carried out in contravention of the provisions of the Consulting Law, and also presented them with a false representation that his investments were managed in accordance with the law.
- There is no dispute that the defendant did not hold an investment management license (see P/33, p. 33, para. 37). On the landing page (P/10, p. 9), the defendant writes, "Is the method legal?He replies, " Of course. The method is allowed to be used almost all over the world." The defendant's elaborate public publications also contributed to the perception that the activity was legal. The extensive evidence documenting the relationship between the defendant and the clients also indicates that the defendant did not disclose to his clients that he did not hold an investment management license. The clients testified that the picture presented to them was that this was a legal activity (Khoury - February 13, 2023, p. 146, paras. 27-30, p. 147, paras. 7-8; File P. 26.2.2023, p. 214, S. 36, p. 215, S. 1-2; Harel P. 26.2.2023, p. 239, s. 18; Buchnik P. 26.2.2023, p. 293, s. 15; Asa, March 8, 2026, p. 319, paras. 16-19; p. 300, paras. 15-19; p. 305, paras. 1-6).
- The accuser's argument is, as stated, that the representation as to the legality of the action stems, inter alia, from the fact that the defendant does not have a license to engage in investment management, hence the discussion of this representation is intrinsically connected to the question of whether the defendant violated the Advice Law by managing the clients' investments. This is the second indictment that deals with this question, which we will discuss at length below. Whereas the conclusion, as we will detail below, that the defendant's activity was contrary to the Consultation Law, the representation that the defendant presented to the clients in this matter is misleading. Moreover, as we will clarify below, the argument that the defendant did not know that his activity was illegal must be rejected. The evidence indicates that the defendant knew that he was acting in contravention of the Counseling Law.
The "Thing" Received
- Did the defendant receive a "thing" as a result of the false representations? The answer to this is in the affirmative. It should be recalled that according to what is alleged in the indictment, what the defendant received as a result of the false representations was "the consent of at least 9 customers to trade in the funds they deposited in the merchant's arena." As we noted earlier, in light of the accuser's waiver of the testimony of one of the clients, it is a matter of obtaining the consent of 8 clients.
- The argument, therefore, is not the fraudulent receipt of funds from the customers, but rather the receipt of their consent to trade in the funds they deposited on the trading platform. As the evidence indicates, the defendant also obtained the consent of the clients.
- Section 414 of the Penal Law states that even a benefit will be considered a "thing". Therefore, obtaining the consent of the clients to trade in the funds they deposited on the trading platform is definitely something according to its meaning in the law. Apart from the definition found in the Penal Law, the case law has interpreted the term extensively. It was emphasized that the expression "matter" encompasses a wide range of meanings, including benefits that are not necessarily tangible (Criminal Appeal 8080/12 State of Israel v. Olmert, para. 124 of the judgment of Justice (as he was then called) Jubran (September 28, 2016)); Tapiro, verse 126). Moreover, the benefit of the recipient of the fraud does not have to be expressed in a material advantage or achievement. Therefore, tangible damage or loss caused to fraud is not an indispensable condition for a conviction of an offense, because the offense of fraudulent receipt deals with an advantage or achievement for fraud and not with a disadvantage for fraud (Barzel, at p. 555). A loss to a fraud can also be expressed in the very violation of his freedom of consideration and decision as a result of the fraud. This result is derived from the social value protected by the offense of fraud - the protection of the freedom of will, freedom of action and freedom of choice of the fraudster (Barzel at 555; see also Dan Bein, "The Social Interest Protected by the Offense of Fraud," Hapraklit 26 85 (1970)). Hence, the argument that obtaining the consent of the investors is not a "thing" should not be accepted. Moreover, the fact that some of the clients accepted with equanimity the fact that they had lost their investment does not detract from the defendant's criminal liability (compare: the Tubul case, para. 66).
- More than necessary, we should note that in the case before us, obtaining the customers' consent to trade in their accounts was not "for heaven's sake", because the defendant did not deny that he charged the customers for the installation of the software and received a reward in the form of a success fee (P/2, p. 10, para. 40).
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