The Financial and Consumer Affairs Authority (FCAA) is warning Saskatchewan investors about unregistered binary option companies soliciting investments through cold-calls and email.
Recently the FCAA has become aware of several instances where companies seeking investors for binary option online trading have been involved in investments resulting in substantial losses. Binary options are essentially “bets” on whether the price of a stock or commodity will increase or decrease over a fixed (often very short) period of time. Binary options are sometimes referred to as “all or nothing” options. They are generally unregulated, traded on the internet and prone to fraud.
Companies and individuals promoting binary options in Canada are required to register with the securities regulator in each province or territory where they do business. None of the companies that have been contacting residents of Saskatchewan in this matter are registered in Saskatchewan.
Although the majority of the suspect companies identified claim to be based in England, Singapore and Hong Kong, investigation has shown they are actually operating from elsewhere. Cold-calls from offshore companies seeking investors are a very common red flag for investment scams and fraud. Saskatchewan investors should be aware that investing with these companies can be extremely risky.
It can be nearly impossible for investors to recover their money and alleged profits once the funds have moved offshore. Though the initial investment nearly always shows a huge gain, funds often suddenly disappear once the investor tries to access them.
The FCAA encourages all investors to check the registration status of any person or company selling investments by using the Canadian Securities Administrators’ National Registration Search database at www.aretheyregistered.ca. If you have concerns that an unregistered company or individual is contacting you about an investment contact the FCAA’s Securities Division, Enforcement Branch at 306-787-5936.
The FCAA is the regulatory agency responsible for administering Saskatchewan’s securities laws, and is a member of the CSA, the council of securities regulators of Canada’s provinces and territories which coordinates and harmonizes regulation for the Canadian capital markets. Their mandate is to protect investors from unfair or fraudulent practices through regulation of the securities industry. Part of this protection is educating investors about the risk, responsibilities and rewards of investing.
