The Manitoba Securities Commission (MSC) is cautioning investors about onetwotrade.com, a trading website operated by Up and Down Marketing Ltd., purportedly located in the country of Malta.
The trading website and the are not registered to sell securities in Manitoba, the MSC says in a statement, and that their actions are not in compliance with provincial securities laws. There are currently no Binary Option firms registered to do business in Manitoba, the MSC adds.
"We were recently advised that at least one Manitoba resident has responded to an online advertisement encouraging him to invest in binary options via an online trading platform," says Jason Roy, senior investigator with the MSC.
"This investor invested approximately $100,000 and used a credit card to fund a portion of his account. It is unlikely that he will be able to get his money back. In addition, he may be subject to the higher interest rates charged by his credit card company," adds Roy.
Binary options are a sort of "wager" where investors bet on the performance of an underlying asset, often a currency, stock index or share, usually in a short period of time. When that period is up, the investor receives a predetermined payout or loses his wager. It's an "all or nothing" proposition.
"With some of these offshore investments, no actual trading takes place and it is just a tactic used to steal an investor's money, the MSC says. "A request to send your money offshore to an unregistered firm is a red flag for investment fraud."