FINRA cautioned investors on the risks associated with binary options and offered guidance on how to avoid certain frauds.
In an Investor Alert, FINRA advised investors to be "wary" of non-U.S. companies offering binary options trading platforms, warning that investors may be subject not only to fraud, but also to identity theft. In addition, FINRA urged investors who already have an account to be aware of signs of fraud, such as (i) pressure from companies to send money, (ii) excuses from the firm as to why it cannot credit gains to a customer's account, or (iii) why it cannot close an account. FINRA also included links to relevant SEC and CFTC materials.
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