Canadian financial watchdog, the Manitoba Securities Commission (MSC), has issued a warning against the company Option Ventures, operating the binary options website Iseebinary.com. According to the commission, the company has swindled an 81-year-old widow from Manitoba out of all her savings, amounting to $28 000. She has wired the money to Option Ventures, a company purportedly located in Moldova.
“She (the victim) became aware that it was a scam when the adviser told her that he was being fired by Iseebinary.com because he could not get any more money out of her,” said Led Terlinski, investigator with the MSC and emphasized that there are no binary option brokers, registered to operate in Manitoba.
The MSC warns investors that they must not send money to anyone they only know from an unsolicited e-mail or phone call and should never give out sensitive personal information to unknown people over the internet or on the phone. The watchdog strongly advises people to do a proper research before investing and make sure that the company, offering its financial services is registered with the regional financial regulators in Canada.
Binary options are a type of financial instrument very much akin to gambling. The “investor” bets on random events such as whether the price of a financial instrument will go up or down or whether it will reach a certain price within a very short period of time. It is an all or nothing proposition and the “investor” could lose a large sum very fast.
In many countries the binary options are legal, while in others, such as the US, are subject to strict regulations and limitations. In Canada, though binary options are not explicitly illegal, there are no registered binary options brokers.
Binary options are usually offered in the portfolio of forex brokers, but there are companies only offer trading in binary options. Some of them are properly registered and regulated, but many are rather shady affairs operating out of offshore zones, soliciting unsuspecting individuals and often swindling them out of large sums, like this case in Manitoba.
The financial regulators of many countries are regularly issuing warnings about unregistered binary options brokers and fine them for various violations. The most recent example of a financial penalty is the hefty $11 million settlement the Banc de Binary broker has agreed to pay to the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) for soliciting US clients, without having the legal right to do so.