Regulators in Quebec report that they are seeing a rise in suspicious schemes involving unregistered binary options trading platforms, as well as the emergence of follow-up scams targeting victims who have already lost money to one of these sorts of schemes.

Binary options allow investors to wager on the performance of an underlying asset, such as a currency, stock index, or individual stock, in ‘all or nothing’ bets.

The Autorité des marchés financiers (AMF) Thursday urged Quebec investors to exercise caution given the recent rise in the number of suspicious schemes by unregistered foreign companies encouraging them to invest in binary options via on-line trading platforms

“In the past few weeks, AMF investigators, in particular the cybersurveillance team, noticed that companies based mainly in Cyprus, the Virgin Islands and the United Kingdom were using tactics that seem to target Quebeckers,” said Jean-François Fortin, executive director of enforcement at the AMF. “Our investigators discovered web banners with special offers for Quebec investors as well as demo accounts posting lots of profits, which is quite unusual,” he added.

The AMF stresses that unauthorized binary options trading platforms “are sometimes associated with scams”. And, it reminds investors of the risks of dealing with these firms, which include not just the risk of losing their money, but also fraud and identity theft.

The regulator notes that, as with other sorts of investment frauds, it is now also seeing a new scheme that targets investors who have already lost money on these kinds of unauthorized online trading platforms in the past few months. Some of these schemes even claim to be working at the behest of regulators, such as the AMF, to help investors recoup their money.

“It appears that a few of these companies were running multiple platforms. Some consumers who opened accounts, submitted personal information, made investments and lost money, are now being hounded to invest via a new platform. The callers speak French, and attempts are made to obtain credit card numbers. It is important that the public be on their guard,” Fortin warns.

The AMF stresses that investing is a regulated activity, and that investors should always check registration before they deal with any company for investments. It also published an updated list of websites that are not authorized to offer investment products and services in Quebec; highlighting seven platforms most recently identified as suspicious.