Official investigators shut down another company in their continuing crackdown on binary options scammers.
Customers who had traded binary options on a platform run by Metro Options Limited lost more than £350,000 in the fraud.
The Insolvency Service revealed the company promised customers:
- Profits between £400 to £500 a trade were possible
- Customer deposits would be matched by the company and a bonus paid
- Between 50% and 100% of trades would be insured
- The company had at least 600 customers
- Metro Options was expecting a licence from the Cyprus Securities and Exchange Commission
- Losses would be refunded
Behind-the-scenes, Metro Options traded between July 2015 and December 2016, but the directors disappeared, and the web site was abandoned.
Customers denied promised refunds
The company had encouraged customers to bet on the movements of financial markets. Cold-called customers say they were offered returns of between £1,000 and £2,000 a week on an investment of £10,000.
Customers were ignored when they asked for their promised refunds.
Many complained to police, who discovered that the company was not based in Canary Wharf offices as advertised and had no bank account – although customers paid money into at least eight bank accounts held by others.
The Insolvency Service spoke to director Kyle Snoxell, who resigned as a director on the same day as he was appointed in June 2015.
He explained that he set up the company but upfront costs of setting up the operation were too expensive, and he pulled out.
A new director, Miklos Atila from Romania, was appointed but could not be traced.
Binary option scams
Cheryl Lambert, a Chief Investigator at the Insolvency Service, said: The Insolvency Service will act against companies that make unfounded and misleading statements to induce members of the public to invest money.”
Metro Options was wound up in the public interest by the High Court.
Until recently, regulators have regarded binary options as betting, but from January 2018, the Financial Conduct Authority will supervise the market.
“Binary options scams, which commonly promise higher than average returns for bets that never occur and manipulate software to distort prices and pay outs. They also commonly refuse to return client funds and break all contact with customers,” said the FCA.
“Fraudulent binary option firms often advertise on social media. The advertisements link to websites that are well-designed and appear professional.”