Binary Options Fraud: Betting Above or Below
Binary options differ from more conventional options in significant ways―making it an investment arena subject to many fraud schemes.
Understanding Binary Options
A binary option is a type of investment contract where the payout depends entirely on the outcome of a yes/no proposition. Typically the yes/no proposition relates to whether the price of a stock or other asset will rise above or below a specified amount, at a specified time. The following are examples of binary options and the yes/no proposition connected thereto:
- Whether the stock price of “X” company will be above $8.37 per share at 1:30p.m. on a particular day.
- Whether the price of platinum will be above $929.00 per ounce at 10:13a.m. on a particular day.
Under these binary options, if the stock or platinum price is above the specified price, at that time, on that date, then the proposition is a “yes” and the option will payout. Alternatively, if the price is below the specified price, then the option will not payout. Binary options are also known as “all-or-nothing options” or “fixed-return options.”
Under regular stock options investors are given the opportunity to buy stock, commodity, or other asset. With binary options, investors are making an above or below bet on what the value of something will be by a certain time.
Binary Options Fraud
Some binary options are subject to oversight by the SEC by virtue of being traded on a designated contract market or being listed on a registered stock exchange; however, the majority of binary options on the market are operating outside of these official channels. The binary options market largely operates on Internet-based trading platforms. These sort of Internet investment platforms do not always comply with regulatory requirements and some promote fraudulent investment schemes. These schemes may involve refusal to credit customer accounts, identity theft, or manipulation of software to generate losing trades by ensuring the “no” proposition prevails.
Though, simply because a binary option does not payout and an investor loses his or her money does not mean that binary option fraud occurred or that the investment was in anyway a scam. Investments by their very nature are sometimes bad.
Defending Against Investment Fraud Charges
If you are facing charges of binary options fraud or securities fraud, you need an aggressive and experienced white collar criminal defense attorney on your side. Ashley D. Adams is a former fraud prosecutor with the United States Attorney’s Office. She understands how prosecutors operate. Given her prior work, she also has a longstanding and positive relationship with the U.S. Attorney’s Office, the Attorney General’s Office, and the Department of Justice. Put Ashley D. Adam’s experience to work for you.
Contact us or call now (480) 219-1366 for a case evaluation.
The attorneys at Ashley D. Adams, PLC handle federal criminal cases throughout the United States, including Arizona, Oklahoma, Utah, and California.