The Financial Industry Regulatory Authority (FINRA), in a press release on March 16, 2017 warned investors against companies or persons that approach victims of binary options fraud claiming that, for an up-front fee, they can help them recover the sums invested or the losses incurred on unlawfully operating trading platforms. Investors should verify that they are dealing with a licensed attorney or regulator prior to engaging in such recovery efforts.
As stated in the release by FINRA, 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. These options may be fraudulent and sold on illegitimate securities boards, but participation in such options may open an investor to further victimization.
After an individual has participated in such investment activity, fraudulent individuals obtain investor information from the illegitimate boards selling the options and then calls the investors, and can further be spotted with the following hallmarks during the call:
- urgent correspondence and high-pressure calls that specifically refer to your binary options accounts;
- claims that the caller is with, or acting at the behest of, U.S. government agencies; and
- subsequent correspondence with official-looking documents that make it look as if money is available, and can be recovered for a fee.
FINRA cautions investors that some of these offers may be fraudulent because it is often very difficult to track down the person or group that has scammed them.
“Following a significant loss, investors may be anxious to get back at least some of their money. This can leave them vulnerable to follow-up frauds that add to existing losses with devastating financial consequences,” said Gerri Walsh, FINRA’s Senior Vice President of Investor Education.
The FINRA release can be found at the following link.