Secretary of State warns of binary options firms defrauding Missourians

The state of Missouri’s securities watchdog issued cease and desist orders last week to three unlicensed firms that allegedly sold unregistered binary options to Missouri investors.

The firms — Glenridge Capital, Tropical Trade and Morgan Finances — all made untrue statements, omitted material facts or engaged in fraud, according to a release from Secretary of State Jay Ashcroft’s office.

The three are accused of using binary options — high-risk options that involve investors essentially making a “yes” or “no” bet on the future value of an asset — to bilk investors out of hundreds of thousands of dollars. The firms have been asked to pay compensation plus interest, civil penalties and costs of the investigations, according to the release.

Glenridge Capital

The Dublin, Ireland outfit is accused of reeling in $170,000 from two Missouri residents in 2016 and then not letting them withdraw all of their gains when the accounts appreciated. The firm’s website was unavailable when the Securities Division checked it in June, according to the release.

Tropical Traders

In late 2016, a Missouri resident invested $92,000 in binary options through Tropical Traders, based in Liverpool, U.K. The individual who was falsely promised 65 to 85 percent returns on investments, lost all the money, according to the release.

Morgan Finances

A 57-year-old St. Louis resident invested about $39,000 in Morgan Finances, listed as a New York City operation. The firm remained unresponsive to requests for withdrawal by the individual. 

Ashcroft said in the release that Missouri residents should be aware of the risks associated with investing their money in unregistered binary options. He urged them to conduct a background check before investing.

Research shows that investment scammers cheat U.S. residents out of $10-$40 billion dollars annually. The National Academy of Sciences found that the elderly are more vulnerable to such scams.

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