Oh dear! Binary options scammer makes cold call – finds out the ‘customer’ is a regulatory official!
When a binary options salesman attempted to dupe Jason Roy out of his money, little did he realize that Mr. Roy is a senior investigator for one of Canada’s major regulatory authorities, and is also on the advisory board against binary options fraud
Eventually, the use of false names to cold call unsuspecting members of the public by unregulated binary options call centers is met with the probability that at some point, the recipient of the call may be rather more enlightened than the usual target audience.
In this particular case, Jason Roy, from the province of Manitoba in Canada was at home when his telephone rang at 6.00pm on April 11 this year.
Mr. Roy answered the call, and was greeted by a salesman who went by the name of Sean Bessi, and introduced himself as a representative of a binary options brand called Central Option.
Mr. Roy listened attentively whilst Mr. Bessi explained how Central Option could offer him an ‘amazing investment opportunity’ even though the brand is not licensed to sell binary options products in the province of Manitoba, and despite the widely known fact that off exchange binary options, rather than being investment opportunities, have their roots in gambling and customers are very much against the ‘house’ when placing fixed-odds bets.
Indeed, no liquidity feeds are used, and binary options brands simply execute the orders themselves with the odds very much in their favor in most cases. This has been the subject of widespread media and regulatory attention globally recently.
What Mr. Bessi did not realize is that Mr. Roy is a senior investigator with the Manitoba Securities Commission (MSC), which is the financial services regulatory authority for the province of Manitoba.
Mr. Roy therefore decided to use this call to carry out his professional responsibilities, and began gathering evidence while pretending to be a potential high-value investor.
Aside from his professional career as a senior regulatory official, Mr. Roy is also a member of the Canadian Securities Administrator’s (CSA) special working group on combating Binary Options investment fraud.
“I grabbed my notebook, and after confirming some details with an operator, I was connected to an individual identifying himself as Sean Bessi,” said Mr. Roy today.
“Mr Bessi started to pitch me on the exact sort of illegal investments I’ve been investigating for the past two years. It was a bit surreal” – Jason Roy, Senior Investigator, Manitoba Securities Commission
Location location location… or not!
As with many nefarious binary options brands, Mr Bessi made tall claims about where he was based, telling Mr. Roy that he was working from a Central Option office in Toronto, and that the firm maintains offices in London and Hong Kong.
Mr. Bessi explained Binary Options trading was “very safe,” and “not gambling.” Mr. Roy was offered a free education package and a $100 credit to do some trading and then Mr. Bessi then walked Mr. Roy through the whole trading process, repeatedly suggesting he fund the new account by using his credit card or wiring money.
An ‘all or nothing’ proposition, most brands rely on very strong sales practices to gain deposits from retail customers which they approach by purchasing lead lists.
Canada considers binary options to be at best gambling, at worst fraud – accuses all brands of stealing money
Far from having a background in financial services or technology, most of the binary options industry has its roots in gambling, affiliate marketing and lead buying. In most instances, no actual trading takes place and the sales pitch is just a channel to steal money. The Manitoba Securities Commission also holds this view, and advises that a request to send money offshore to an unregistered firm is a red flag for investment fraud.
Mr. Roy continued to investigate this matter and as a result, the Manitoba Securities Commission has since confirmed the Toronto office does not exist. Central Option’s phone number is a VOIP number that forwards the call outside of the country.
In the last two months, Manitobans have reportedly lost nearly $160,000 to unregistered, offshore Binary Options firms. MSC suspects losses may be higher due to unreported cases.
The Manitoba Securities Commission therefore advises all investors that there are currently no Binary Options firms registered to sell securities in Canada, and that customers should NEVER send money to anyone that they only know from an unsolicited phone call or email.
The regulator also advises customers never give out sensitive personal information online or over the phone, and always to conduct extensive research on an investment before making a commitment.
Investors who believe they’ve been approached by an unregistered individual or firm are encouraged to contact the Manitoba Securities Commission immediately at 1-855-FRAUD-MB to file a complaint or speak with an investigator.