Call Now For a Free Consultation:
(614) 502-6165

Investor Advice: Be Wary of All-or-Nothing Options

Trading binary options may seem tempting depending on your situation, but come with an extremely high level of risk due to the fact that they are all-or-nothing propositions – when they expire, you either lose your entire investment or make a pre-determined sum of money. Fraudulent schemes, many of which originate outside of the country, only add to the risk level of these binary options.

The Financial Industry Regulatory Authority (FINRA) recently reported that their Securities Helpline for Seniors has received a number of calls that indicate a worrying number of binary option scams are making the rounds. According to callers, they have received offers from firms claiming to be binary options trading firms. However, these scammers require payment to receive an investment return, refuse to return any funds, and fail to deposit the funds investors pay in their accounts.

At least one caller reported a scammer claiming to be a representative from a regulatory organization accusing them of taking part in illegal binary options trading, and demanded that the recipient of the call pay them a fine. Other callers have reported instances where scammers claim to be able to return investor’s funds once they pay an advance fee. Both the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have received calls reporting similar issues.

Investors considering binary options need to take care when receiving these types of calls from companies outside the United States in order to avoid becoming the victim of one of these scams. This includes demo accounts that allow investors to test trading binary options without risking personal assets and applications that imply a quick and simple path to wealth. Scammers pay attention to these types of accounts in order to determine who to target with offers of “real” trading accounts or by requesting personal information in order to commit identity theft.

If you have already opened an account, keep a close watch for any signs of fraud including:

  • Requests / pressure to send additional funds
  • Excuses when asked why the firm is unable to credit gains to your account
  • Excuses when asked why an account cannot be closed
  • Excuses when asked why the firm cannot send alleged gains to you

Protect Yourself Before You Invest

  • Perform a background check on any individual or firm using FINRA’s BrokerCheck before you make any investment.
  • Use the SEC’s website to see if the binary options trading platform is properly registered, and take a look at registered trading platforms to see if it’s listed.
  • Use the CFTC’s website to check whether or not the binary options trading platform is a designated contract market. As of this alert, only three markets offer binary options.
  • Check whether or not the binary options trading platform is registered with the SEC to offer and sell their product through the SEC’s EDGAR system.

Unfortunately, people can still fall prey to these types of scams no matter how prepared and cautious they are. If you lost money by investing in one of these scams, contact one of the investment fraud attorneys at Meyer Wilson today. We have helped thousands of victims of fraud recover their losses, and handle all cases on a contingency fee basis – you won’t owe us any legal fees until we help you recover your lost funds. Call us at one of our four locations today, or fill out our online form to start out with a free case consultation.

Related Posts:

The information contained in The Firm’s posts on its blog, fraud alerts, investigations or elsewhere on the site is based upon information obtained from other sources including, but not limited to, news outlets and federal, state, and regulatory agency filings. All suspects and subjects of postings herein are presumed innocent until proven guilty in a court of law or administrative action and any and all crimes are alleged until a court or regulatory agency finds otherwise .

Share This Story
If you found the information provided by this article useful, consider sharing to your social media channels to help others in their search for reliable resources.
Consult with Our Legal Team
There is never a cost associated with a consultation

Columbus Office

614-224-6000
305 W. Nationwide Blvd
Columbus, OH 43215
Meyer Wilson
New Orleans Office

900 Camp Street 
Suite 337
New Orleans, LA 70130
Los Angeles Office

310-905-8688
2029 Century Park East,
Suite 400N
Los Angeles, CA 90067
Cleveland Office

216-600-1355
6140 Parkland Blvd.,
Suite 330
Mayfield Heights, OH 44124
Bloomfield Hills Office

248-817-8214
41000 Woodward Ave.,
Suite 350
Bloomfield Hills, MI 48304
Quick Links
Follow Us
The information contained in this Website is provided for informational purposes only, and should not be construed as legal advice on any subject matter. No recipients of content from this site, clients or otherwise, should act or refrain from acting on the basis of any content included in the site without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from an attorney licensed in the recipient's state. Read More
The information contained in this Website is provided for informational purposes only, and should not be construed as legal advice on any subject matter.
Read More
chevron-down linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram