The Financial and Consumer Affairs Authority of Saskatchewan has issued cease trade orders against two binary options companies based in Europe.
Mpower Technologies Limited (operating under the name of CFD Corporate) and Melnic Group Ltd. (which operates under the name of BossCapital.com) are prohibited from trading securities in Saskatchewan until at least May 3, as neither company is registered to trade in securities in the province.
Binary options companies are coming under increased scrutiny in Canada, with some critics saying the sites are rigged to lure in victims with early returns.
Unlike regular stock options, binary options are all-in — bet right and you make all the money from the person on the other end of the trade; bet wrong and you lose it all.
A "free" $100 in credits is the kind of thing that's offered to get a investor hooked. But in many instances, warn Canadian regulators, no actual trading occurs.
Sask. residents lost more than $420K
"Saskatchewan residents continue to fall victim to these solicitations. Over the last two years, Saskatchewan residents have lost more than $420,000," said the provincial regulator's enforcement branch deputy director Ed Rodonets in a news release.
If residents receive unsolicited calls or online offerings of investment opportunities, the Authority recommends immediately checking to see if the companies are registered to do business in Saskatchewan.
Potential investors can check the registration status of any person or company selling investments by using the Canadian Securities Administrators' National Registration Search database.
The Financial and Consumer Affairs Authority says anyone contacted by Mpower Technologies Limited, CFD Corporate, Melnic Group Ltd., or BossCapital.com, or any of their representatives should contact its securities division at 306-787-5936.