In an important case, the United States Commodity Futures Trading Commission, simply referred to as the CFTC, have managed to heavily fine two fraudsters targeting members of the public with binary options scams. In total, a $22 million fine was imposed on the two defendants after the damage that they have caused.
What are Binary Options Scams?
Not a lot of people are aware of what a binary options scam is. Essentially, this is a type of fixed-odds betting. In other words, there will be an important event happening that will have an effect on shares or assets. If you are correct and the price goes up you will see a return on investment. However, if the price does not go up, you are going to lose money.
Unfortunately, there are a lot of binary options scams out there that look legitimate. Often, they are on online trading platforms, claiming to be a quick way to make good money. In reality, they are run by fraudsters who are going to take your money and you will see nothing in return.
The Michael Shah and Zilmil Case
Michael Shah and Zilmil ran a sophisticated binary options scam through the internet, which is believed to have operated for five years. This was through platforms such as Vault Options, Trade rush, OptionRally and Bloombex Options. They were operating as unregistered commodity trading advisers and tricking people out of their money.
This included sending over 60 million emails out to people. The statements that they made in these emails were false and deliberately created to mislead people. For instance, they made a claim that you could make millions with their recommendations. Indeed, they went on to make around $17.8 million.
Judge Timothy Corrigan of the U.S. District Court for the Middle District of Florida ensured they had consequences for their actions. This includes a consent order for permanent injunction and a $22 million fine.
Unfortunately, the judge warned that there might not be enough funds in order for all of the victims to be compensated. Indeed, this is often a reality with high-profile cases. If you find that you have been a victim of a fraudulent scam, it is best to look for help straight away. For instance, Payback can help you against binary option scams and aim to recover the money you have lost.
Ways to Avoid Investment Scams
The reason that Michael Shah and Zilmil were able to run a successful scam was because people responded to their emails. Therefore, one of the best ways to avoid falling for an investment scam is to ignore any unsolicited contact through emails or telephone calls.
You also want to look out for huge promises, such as making you a millionaire or that you are making an investment with no risk. These promises should be viewed as red flags. You should also look out for social media adverts and avoid clicking on them and entering personal details.