SEC accuses three men of $100 mln binary option scam

[mlawson71]

Three men managed to squeeze out more than 100 million USD of gullible investors through three binary options websites in what appears to be one of the biggest binary options scams, the U.S. Securities and Exchange Commission (SEC) revealed on Thursday.

Kai Christian Petersen, Gil Beserglik, and Raz Beserglik used misleading marketing techniques and manipulative call centers, also known as boiler rooms, to convince investors to trade binary options through three websites, reads the official complaint filed in the U.S. District Court for the Central District of California.

 

[expiated]

Never even heard of them.

 

[jys78]

Amazing that people keep falling for this kind of stuff although I guess the scammers wouldn't try it if it didn't work.

 

[zdreg]

View attachment 210161
Never even heard of them.

They never heard of you, How did you get so lucky? Are you an expert on binary option firms?

 

[gaussian]

Amazing that people keep falling for this kind of stuff although I guess the scammers wouldn't try it if it didn't work.

It's really not. Put yourself in the shoes of the average newbie in options. If you didn't come from a finance/technical background and you're just Blue Collar Joe:

1. You're up late, probably a 6 pack in, and ESPN runs a commercial on this way that people are making $2,000 a month.

2. Intrigued - you could use that money to pay for your kid's school, medical bills, whatever

3. You pay into these things thinking they are the holy grail. "Easy" you say to yourself - NADEX tells me that all I have to do is say this thingy goes up in an hour and BAM I have money. They even said I could do it from my phone on my lunch break - beautiful.

4. You bankrupt yourself, now hopelessly addicted to chasing that high of your first small win. You don't have the market sense to get out (you have no training) and the platforms make it easy to click "red" or "green" and turn on the "money machine" they claim to sell.

5. Many of these places (NADEX is somehow regulated...) just pocket the cash and act as buckets. You don't even own anything. It's pure gambling in the roulette sense. Reminds me of the early online poker days. Cashing out was basically impossible because the money you put in isn't actually yours anymore.

It's a very seductive and dangerous road. The people falling for these things are typically not gullible by nature. They are low on cash and need extra income, want to work from home, or any number of the other things the ads you see and commercials you watch say. Perhaps you were scrolling through Amazon and got a recommendation for any one of the THE MILLIONAIRE OPTION MONEY MACHINE style books. Sounds great right?

It's not you and me. It's them. It's the average person who doesn't believe in investing, probably has a fully managed 401k they contribute to mindlessly, and might have a few bucks to spend on something like this. They typically have good intentions that, through their own monetary need, do not pay attention to the warning signs these "brokers" place so obviously all over their websites.

To gain some empathy for their situation I'd suggest taking a trip to youtube and watching the first 5-10 videos (really, ads) that come up for searches like "binary options system", "binary options", "day trading", and "options income".

 

[pipeguy]

Three men managed to squeeze out more than 100 million USD of gullible investors through three binary options websites in what appears to be one of the biggest binary options scams, the U.S. Securities and Exchange Commission (SEC) revealed on Thursday.

Kai Christian Petersen, Gil Beserglik, and Raz Beserglik used misleading marketing techniques and manipulative call centers, also known as boiler rooms, to convince investors to trade binary options through three websites, reads the official complaint filed in the U.S. District Court for the Central District of California.

I think this happened in the middle of popularity and lax regulation of binary options. As they have been pressured recently I think the number of scam cases will be gradually reduced to single cases.

 

[mlawson71]

I very much hope so because these scams are atrocious.

 

[Sig]

It's really not. Put yourself in the shoes of the average newbie in options. If you didn't come from a finance/technical background and you're just Blue Collar Joe:

1. You're up late, probably a 6 pack in, and ESPN runs a commercial on this way that people are making $2,000 a month.

2. Intrigued - you could use that money to pay for your kid's school, medical bills, whatever

3. You pay into these things thinking they are the holy grail. "Easy" you say to yourself - NADEX tells me that all I have to do is say this thingy goes up in an hour and BAM I have money. They even said I could do it from my phone on my lunch break - beautiful.

4. You bankrupt yourself, now hopelessly addicted to chasing that high of your first small win. You don't have the market sense to get out (you have no training) and the platforms make it easy to click "red" or "green" and turn on the "money machine" they claim to sell.

5. Many of these places (NADEX is somehow regulated...) just pocket the cash and act as buckets. You don't even own anything. It's pure gambling in the roulette sense. Reminds me of the early online poker days. Cashing out was basically impossible because the money you put in isn't actually yours anymore.

It's a very seductive and dangerous road. The people falling for these things are typically not gullible by nature. They are low on cash and need extra income, want to work from home, or any number of the other things the ads you see and commercials you watch say. Perhaps you were scrolling through Amazon and got a recommendation for any one of the THE MILLIONAIRE OPTION MONEY MACHINE style books. Sounds great right?

It's not you and me. It's them. It's the average person who doesn't believe in investing, probably has a fully managed 401k they contribute to mindlessly, and might have a few bucks to spend on something like this. They typically have good intentions that, through their own monetary need, do not pay attention to the warning signs these "brokers" place so obviously all over their websites.

To gain some empathy for their situation I'd suggest taking a trip to youtube and watching the first 5-10 videos (really, ads) that come up for searches like "binary options system", "binary options", "day trading", and "options income".

It's a little annoying when folks lump Nadex with the unregulated bucket shops. They aren't "somehow regulated", they're regulated by the CFTC same as every other futures exchange. If you know they're doing something that violates US law, it's incumbent on you to report the specifics. If you don't have any specifics, then one wonders why the hate? If you think their model allows market makers to take advantage of the exchange then become a market maker and rake in the big bucks, I think the minimum capital requirement is ridiculously low like $500k. They most certainly aren't flat out taking people's money per the OP.

 

[Overnight]

It's really not. Put yourself in the shoes of the average newbie in options. If you didn't come from a finance/technical background and you're just Blue Collar Joe:
...

What amazes me about it all is how many new fish are still out there. Damn. One would figure that all the suckers had been taken out by now, after all these years, learned their lessons, and would not fall for the same scam again.

 

[gaussian]

It's a little annoying when folks lump Nadex with the unregulated bucket shops. They aren't "somehow regulated", they're regulated by the CFTC same as every other futures exchange. If you know they're doing something that violates US law, it's incumbent on you to report the specifics.

I said somehow for a very specific reason. The merits of calling binary options anything but gambling are suspect at best. NADEX should be regulated as a casino and not a legitimate trading firm. It is the trading equivalent of horse races. If you lose you do not own anything, and cannot call them and say "execute my option and deliver to me my stock" within the timeframe allotted (as far as I know). This treads awfully close to how real old-time bucket shops worked. In fact, it's almost a word-by-word redefinition. In theory, if I called AMP and asked for delivery of 5000 bushels of corn - it could happen. I would have to put up millions in performance bonds, but I could do it. If I had a weekly option at TDA and executed it I would get the underlying delivered to me without question. Last I checked, NADEX does nothing of the sort.

To me, NADEX is just a bucket that paid the CFTC enough to look the other way. Whereas the CFTC may prevent them from outwardly pocketing cash illegally - they are certainly operating the same business model as every other fly by night binary options shop and for that they are very deserving of criticism. Regulate them like a casino and you will hear no complaints from me. The house edge is so absurd it would be crazy to think they aren't taking the other side of every single trade.