"Every law has a logic behind it, otherwise laws wouldn't have been written, so it could be that this law is a law that is logical from one aspect but doesn't make sense from another. If the aspect is to keep the client safe, the client should work under a regulated trading platform. And Pepper Stone is a supervised trading arena, why insist on Israeli supervision, because in Israel there is the issue of taxation, OK and here it's a completely different item, I don't want to get into it right now, it's not our discussion. In any event, my answer is that the clients traded on a trading platform that is supervised by the Australian Securities Authority" (P. 10.9.2025, p. 464, paras. 22-30, and see also pp. 465-466).
- The evidence shows that the defendant is knowledgeable in the field of investments and is aware of the requirements of Israeli regulation (P/2, pp. 36-38; p. 215, s. 17; P/162 conversation from the defendant's phone, p. 1; P/152, a message he sent to Elisef Dardick; P/10, the landing page). It also appears that the defendant is well aware that he is not allowed to offer "robots", due to the regulation in Israel. Thus, for example, the defendant says to one of his potential clients:
"I understood then that I am not an investment house either, I am a provider of software, computing and training services, but the investment houses in Israel have some kind of regulation from the Israel Securities Authority that they are not allowed to offer robots... So that's why they can't offer you robots or robotic trading systems because people just don't understand it... And once you don't understand something anddeal with it, it's obviously very dangerous and the chances of you losing your money are much higher than you will make money..." (P/150, p. 14; See also P/152).
- Even if I assume in favor of the defendant that doubt arose as to his subjective mistake - and the state of affairs is far from such - it cannot be said that on the objective level the mistake was "reasonably unavoidable", since the defendant did nothing, let alone reasonable means, to ascertain the legal situation in its entirety. This is clearly inferred from the fact that the defendant suspected (at the very least) that the activities on the subject of the investment were under the regulation of the RNA (see P/152), but nevertheless he refrained from contacting the RNA or any other party in order to ascertain the legality of the activity (it appears that the defendant did not inquire on his own initiative whether the activity was permitted in Israel, nor did he receive legal advice, and the defendant himself even noted that it was "irresponsible"; P/2, p. 362, s. 1 ff., up 364; P/4, p. 87, para. 9). Moreover, the defendant does not deny that Pepperstone is not supervised by the RNA (P/2, p. 43, paras. 14 ff.). In this state of affairs, the defendant cannot claim that his mistake is reasonably unavoidable.
- In summary, it cannot be said that the defendant met the burden of proving that he was wrong in a legal situation. Not only that, the evidence clearly shows that he knew that his activity required a license and that his offers to trade in an unlicensed trading arena were against the law. Once the elements of the offense have been proven beyond a reasonable doubt, the defendant must be convicted of the offense attributed to him in the third charge, which concerns the prohibition of offering to trade in an unauthorized trading arena, under section 54(b)(6b) of the N.A.
- Protection from justice
- Although the defendant crowned his claim for protection from justice as selective enforcement, in fact his argument includes two heads that are connected - one, that in the circumstances of the case, given that this is not a serious case, and in the defendant's lack of full awareness, the proceeding should have ended in an administrative track. The second is that the filing of an indictment against the defendant constitutes selective enforcement because in cases with similar circumstances no indictment was filed. Both claims relate to the manner in which the authorities exercised discretion when deciding on prosecution. In addition to these claims, the defendant raised additional individual claims that can be included under the umbrella of protection from justice, which we will address below.
[It should be noted that at the beginning of the proceeding, the defendant filed a motion to cancel the indictment due to the failure to conduct a conditional arrangement with him, but the request was rejected - see decision of August 4, 2022].
- As is well known, the defense of justice claim is intended to apply in cases where the filing of the indictment or the conduct of the criminal proceeding is in material contradiction with the principles of justice and legal fairness, as instructed in section 149(10) of the Criminal Procedure Law [Consolidated Version], 5742-1982. The main justification for its use "is the desire to ensure that the law authorities act appropriately, as required by their status as a governmental body" (Criminal Appeal 4596/05 Rosenstein v. State of Israel, IsrSC 60(3) 353, 372 (2005)). The Supreme Court addressed the doctrine of the defense of justice extensively in additional criminal hearing 5387/20 Rotem v. the State of Israel (December 15, 2021), and noted that: "This defense arose for the defendant following the violation of one of his basic rights - such as the right to liberty, the right to bodily integrity, the right against torture, and the right to a fair trial - by those in power who enforce the criminal law on behalf of the state [...] Such a defense also arises for the defendant because of selective enforcement, which substantially and substantially violates his right to equality before the law [...], as well as when it is proven that the indictment was filed against him on improper grounds of personal persecution, etc., which also amounts to a violation of an important right: the defendant's right to a fair trial [...]."
We will also mention the triple test established in criminal appeal 4855/02 State of Israel v. Borowitz, IsrSC 59(6) 776 (2005) (hereinafter: the Borowitz case), according to which the claim of protection from justice is examined through three stations. In the first stage, the court must identify the flaws that occurred in the proceedings taken in the defendant's case and determine their intensity, regardless of the question of his guilt or innocence; in the second stage, the court must examine whether the existence of the criminal proceeding, despite its flaws, constitutes a severe blow to the sense of justice and fairness, and must strike a balance between the various values that support the conduct of the proceeding versus those that contradict it; in the third stage, The court must examine whether the defects discovered cannot be cured by moderate and proportionate means other than the cancellation of the indictment.
- The accuser claimed that there was no flaw in her decision to file an indictment and not to refer the case to an administrative proceeding. According to her, the circumstances of the case, from which "indications of fraud" arose and evidence of the commission of the offense of fraudulent receipt, necessitated criminal proceedings. On the other hand, the defendant lists a series of cases from which in his opinion it can be learned that the accuser held her hand with the defendant in comparison to others.
- I am of the opinion that the application should be rejected by both parties.
- Section 52D of the NA Law enshrines the authority of the Chairman of the NAA to take administrative action instead of a criminal proceeding. It should be noted that the authority of the chairman of the RNA is exercised during the investigation stage. At this juncture, the chairman of the RNA decides whether to conduct an administrative inquiry instead of a criminal investigation, according to a number of considerations. Section 52D of the Securities and Exchange Act instructs as follows:
"If the Chairman of the Authority has reasonable grounds to suspect that an act or omission has been committed (in this chapter - an act) for which it is possible to conduct a criminal investigation under Chapter 10 or an administrative inquiry as stated in section 52M, the Chairman of the Authority shall decide to conduct such an investigation or inquiry in accordance with the following considerations only: