9/15/2017 10:04:32 AM
For Immediate Release
SAINT PAUL – Minnesota Commerce Commissioner Mike Rothman is cautioning investors about “binary options” investment websites that promise a chance at quick, easy money but have been subject to a growing number of investor complaints.
“Online binary options trading is a new frontier for investment scammers and dangerous territory for many investors,” said Rothman, who serves as the state securities regulator. “Binary options can be a very risky proposition for even experienced investors. The risks are compounded by the explosion of fraudulent online schemes and high-pressure, deceptive sales tactics associated with binary options. The bottom line: As always, do plenty of homework and ask hard questions before making any investment decision.”
Rothman said the /commerce/consumers/your-money/investor-education/binary-options.jspCommerce Department website offers information to assist investors in understanding binary options, their risks and where to turn for help.
A binary option is an all-or-nothing investment contract, similar to placing a bet. Like the flip of a coin, there are only two possible outcomes: Heads you win or tails you lose.
When buying a binary option contract, the investor predicts the value of an underlying asset, such as a currency or stock, at a predetermined time or date in the future. If the investor correctly predicts the asset price at the end of the contract, which can be just a matter of minutes, the investor receives the payout agreed upon in the contract. If not, the investor loses the money invested.
Much of the binary option market operates through internet-based trading platforms. These platforms often are not compliant with U.S. regulatory requirements for investments.
In recent years, the number of unregistered platforms offering binary options has surged, resulting in complaints to securities regulators. These complaints include:
Offering binary options contracts through a website is attractive to scammers because they can reach potential investors while masking their true identities and locations. They will use a variety of tactics to get you to invest.
Be alert for these warning signs:
Commerce is here to help
If you have a question or believe you have been a victim of fraud, contact the Commerce Department’s Consumer Services Center by email at firstname.lastname@example.org or by phone at 651-539-1600 or 800-657-3602 (Greater Minnesota).
Director of Communications
Minnesota Department of Commerce
p: 651-539-1463 | c: 651-368-5050 | email@example.com
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