Foreign firm takes Manitoba woman for $10,000
Winnipeg - The Manitoba Securities Commission (MSC) is reminding the public to think twice before investing with so-called ‘binary options’ firms. MSC recently received a complaint from a 61-year-old Manitoba woman regarding Magnum Options, a company not registered to sell securities in Manitoba, or anywhere else in Canada.
“The victim became aware of Magnum Options via an Internet ad, and subsequently established a $10,200 USD trading account with a credit card,” said Jason Roy, senior investigator with MSC. “These unregistered firms are slick, professional, and often very friendly. They make investing look easy, but the real goal is simply to part you from your money.”
After losing $2,000, the woman became suspicious and contacted the MSC. When she attempted to withdraw the remaining $8,000, Magnum Options told her she was required to complete two trades before she could withdraw any money, due to a ‘bonus’ she did not recall signing up for. Magnum Options then told her what trades to do. Once completed, she received an email stating her account was empty. The company also goes by MagnumOptions.com, magnumoptions.eu, and Hampshire Capital Ventures.
“It’s very unlikely any of her money will be recovered,” said Roy. “Most of these companies are operating offshore, using bogus credentials. It’s an international shell game for the Internet age.”
This year, Manitobans have reportedly lost nearly $185,000 to unregistered, offshore binary options firms, trading under a variety of names. The MSC suspects losses may be higher due to unreported cases.
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—sometimes minutes or even seconds. When that period is up, the investor receives a predetermined payout or loses his wager. It’s an “all or nothing” proposition. In some instances, no actual trading takes place—the sales pitch is just a channel to steal money. A request to send money offshore to an unregistered firm is a red flag for investment fraud.
- MSC advises all investors to follow these tips to prevent becoming a victim of investment fraud:
- Never send money to anyone you only know from an unsolicited phone call or email
- Never give out sensitive personal information online or over the phone
- Research an investment before making a commitment
- Make sure the firm and individual you are dealing with are registered in Manitoba by checking their registration status at recognizeinvestmentfraud.com – there are currently no binary options firms registered to sell securities in Canada
Investors who believe they’ve been approached by an unregistered individual or firm should contact MSC immediately at 1-855-FRAUD-MB to file a complaint or speak with an investigator.