Tennessee Department of Commerce & Insurance notes escalation of binary options complaints
In its advisory, the TDCI’s Securities Division notes the activities of so-called “reload” binary options schemes, where for a fee, investors are promised to recover money previously lost in the binary options scam.
Binary options fraud continues to spark regulatory concerns. In the face of efforts by bodies like the United States Commodity Futures Trading Commission (CFTC) to eradicate binary options scams and to help protect the public against thus type of fraud, the number of complaints about such fraudulent activities keep rising.
This is suggested by an investment advisory issued by the Securities Division of the Tennessee Department of Commerce & Insurance (TDCI) on Wednesday.
“We want to help Tennessee investors better understand binary options, their risks and where to turn for help,” said TDCI’s Assistant Commissioner for Securities Frank Borger-Gilligan.
TDCI notes the recent surge in the number of unregistered platforms offering binary options, resulting in an escalation of complaints to securities regulators. These complaints concern various issues, ranging from salespeople using high pressure tactics or financial threats to theft of investors’ assets.
In its announcement, TDCI warns of binary options “reload” schemes, where scammers target the investor a second time by claiming to be affiliated with a government agency. For a fee, they offer to help the investor recover money previously lost in the binary options scam. FinanceFeeds has been getting emails from people affected by this type of fraud, which is apparently on the rise.
In the United States, there are several binary options trading providers that have the necessary regulatory permission to offer on-exchange binary options trading.
In Canada, there are no licensed binary options providers at this point. Earlier this year, the Canadian Securities Administrators (CSA), an organization which has among its members the securities regulators from 10 Canadian provinces and 3 territories, published a proposal to prohibit binary options. The consultation has closed and it remains to be seen how the CSA interprets the feedback received. A number of organizations have urged that the ban does not apply to on-exchange binary options trading and to IIROC members, whereas others have called the CSA to consider applying restrictions on other high-risk trading instruments like OTC Forex.