The Manitoba Securities Commission (MSC) reports that a couple from rural Manitoba were defrauded of more than $180,000 by an offshore binary options firm that used online ads “featuring the unauthorized likeness of a well-known Canadian celebrity and the promise of large returns” in order to lure victims to the scheme.
“The victims invested money via credit card and wire transfer over a period of nine months and were led to believe their investments were profitable and accessible,” the MSC reports. “They became aware of the fraud when an unknown company began making unauthorized charges on their credit card, and the couple were unable to access or withdraw funds from their account.”
The firm involved, WM Option, has already changed its name to Prime CFDs, the MSC notes, adding that both companies are registered to the same parent corporation in Bucharest, Romania.
“Many of the binary options fraud sites we see are very professional in appearance,” says Jason Roy, senior investigator with MSC, and chairman of the Canadian Securities Administrators’ (CSA) binary options fraud task force. “It could be easy to think you’re dealing with a legitimate company, but there are many red flags if you know where and how to look.”
The MSC says it only had four complaints about unregistered binary options firms in 2015. Last year, it received 58 complaints and it’s on track for similar complaint totals this year.
Earlier this year, the Ontario Securities Commission (OSC) warned that various offshore binary options firms were using TV personality Kevin O’Leary’s image, without permission, to promote their schemes to Canadian investors.
The CSA is currently contemplating proposed rules that would ban the sale of binary options to retail investors.
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