It was claimed that during the relevant period, the defendant referred his clients to Pepperstone, provided them with the answers to the questionnaire as detailed in the first charge, and assisted them in opening the trading account. This is while Preston is an Australian trading arena that is supervised by an Australian RNA, but does not have a dealer license and is therefore not supervised by the RNA in Israel, a fact of which the defendant was aware.
It was also claimed that the defendant motivated his clients to invest their money in Pepperstone, which presented it as a reliable and long-standing international investment bank. The defendant explained to his clients that he works with Pepperstone because its trading conditions are the best for investors, and that investing in it is especially profitable, in part because it is "under the radar" of the Israeli tax authorities.
As detailed in the first charge, the defendant was compensated by Pepperstone for every client he referred to her. Therefore, it was claimed that the defendant had a financial motive to encourage his clients to open their trading account in Pepperstone, a fact that he hid from them.
- The Defendant's Response to the Indictment
- On February 8, 2022, the defendant submitted a detailed written response, and at the meeting on January 22, 2023, he further provided additional details. The defendant denied the indictment and noted that he had a claim of protection from justice due to selective enforcement. In his reply, the defendant presented a general and personal background regarding him and his family, as well as raising additional arguments, which I will review below:
First, it was argued that contrary to the impression that might be created by reading the indictment, the defendant is a "simple and normative person", who traded in the capital market for himself using a "robot", a trading algorithm, and later made a living, for small sums, from transferring the knowledge he had acquired in the same robot software by installing the robot to others, and performing various actions: assisting in opening a trading account, setting up the robot, providing an explanation about it , and providing guidance and accompaniment. The defendant detailed that he purchased the robot ready with its algorithm fixed and all he did was to define it - "comb" it (in the language of configuration). The defendant detailed in extensive detail in his answer how the process was carried out. It was also emphasized that the defendant did not act for others within the framework of his personal account, but only helped others to open their own accounts.