Morgan & Morgan Investigating Binary Options Fraud
The Morgan & Morgan Business Trial Group is currently investigating a global fraudulent scheme involving binary options, which are options contracts in which the payout is determined entirely upon the whether the price of a particular asset—like a stock—will rise or fall below a specified amount. Unlike a typical option contract, binary options do not provide the option to actually purchase the asset.
FBI complaints of binary options fraud have surged in recent years.
In just a few years, the FBI reports that the number of binary options fraud complaints it has received has gone from a handful totaling $20,000 to hundreds of complaints with millions of dollars in reported losses.
If you lost money on a potentially fraudulent binary options contract, contact the Business Trial Group to learn your legal options.
Types of Binary Options Fraud
Binary options fraud schemes typically falls into three categories:
- The perpetrator of the fraud refuses to credit your account or reimburse your funds. Often, these perpetrators cancel your withdrawal requests, freeze your accounts, and ignore your efforts to communicate with them.
- Identity theft perpetrators may falsely claim that the government requires copies of your personal information—such as credit cards, passport, and driver’s license—in order to steal your identity.
- Because binary options are typically traded on internet platforms, they run on specialized algorithms to ensure accuracy and proficiency of the trading system. Perpetrators reconfigure these algorithms to purposely cause you to lose money on your trades. Investors cannot readily see this type of scheme.
Binary Options Fraud Red Flags
As with many modern investment schemes, perpetrators of binary options fraud rely heavily on the internet and social media to entice investors into their scam. Often, these advertisements contain promises of large profits with low risk. The perpetrators may also use boiler-rooms to cold-call potential investors and use high pressure sales tactics and grandiose promises to entice them into investing in the scam.
Promises of large profits with low risks are a telltale sign of fraud.
Investors who are approached with an opportunity to invest in binary options or who currently invest in binary options should be on the lookout for certain red flags that could indicate a binary options program is a fraudulent scheme.
Red flags of binary options fraud include:
- The binary options trading platform has not registered to offer or sell securities with the Securities and Exchange Commission;
- The trading platform is not identified by the Commodity Futures Trading Commission as a designated contract market; and
- The financial professionals you may be dealing with do not hold any professional licenses, are not properly registered with a regulatory agency, or have a lengthy history of regulatory and/or customer complaints.
If you have suffered significant financial losses from investing in a binary options scam, or are unsure whether you invested into a scam, the Business Trial Group may be able to help. Our securities litigation attorneys represent investors nationwide on a contingency-fee basis. This means that our clients pay no upfront fees or retainers, and we only receive a fee if we successfully recover compensation on your behalf.
For a no cost and no obligation case review, please call us at (877) 599 3102 or fill out our case review form.