FINRA (Financial Industry Regulatory Authority) issued an Investor Alert warning anyone involved in binary options trading through unregistered non-U.S. companies. Binary options are inherently risky all-or-nothing propositions. When a binary option expires, it either makes a pre-specified amount of money, or nothing at all, in which case the investor loses his or her entire investment. Consumers using unregistered non-U.S. trading platforms or services may be particularly vulnerable to follow-up scams.
Customers of binary options platforms hear from individuals who appear to know about their accounts and claim to be able to help them get back lost funds, provided the customers pay an upfront fee.
Another scam involves phone calls from an IRS imposter claiming that taxes are owed because of binary options trading. The IRS imposter asks for a debit or credit card number, or may pressure for payment with a prepaid debit card. The IRS never calls taxpayers and demands that they wire or send money — instead the IRS sends a written notification of any tax due through the U.S. mail.
Before getting involved in binary options trading — and before sending any money, consumers should do the following.
Check the U.S. Commodity Futures Trading Commission (CFTC) website to verify that the binary options trading platform is a designated contract market. If it is not registered, do not do business with the organization or individuals associated with it.
Check the U.S. Securities and Exchange Commission (SEC) EDGAR system to see if the binary options trading platform has registered the offer and sale of the product with the SEC.
Check the SEC’s website regarding exchanges to determine if the binary options trading platform is registered as an exchange.
And before any investment
Check FINRA BrokerCheck® and the National Futures Association’s Background Affiliation Status Information Center (BASIC) to determine the registration status and background of any firm or financial professional that you are considering.
If you have questions or feel that you need legal services please contact Darren Blum at 1-877-786-2552 (Stock Law), www.stockattorneys.com for a free consultation