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06 November, 2016

‘Killers having lunch’: The real life Wolves of Wall Street

Part 2

One of the biggest frauds in the UK

Even when the bets are legitimately placed they are hugely risky, but police say the industry is rife with fraudulent brokers.

While other countries have banned this business, a regulatory loophole has left UK victims completely unprotected, despite police saying binary options trading has become one of the biggest frauds in the UK.

Read the Bureau’s investigation: 'How Brits are losing millions to the UK’s biggest scam while the government stands by'

The National Fraud Intelligence Bureau’s head of crime, Detective Chief Inspector Andy Fyfe, said police receive an average of two reports of binary trading fraud a day, with the average investor losing £16,000. “This is just the tip of the iceberg,” he said, but to date there have been no convictions because the fraudsters are usually located abroad.

Binary options trading is not overseen by the Financial Conduct Authority (FCA) because it is classed as gambling rather than a form of investment. But it is not overseen by the Gambling Commission either, because that institution only regulates operators that have equipment based in Britain.

The Treasury issued a consultation paper a year ago which proposed bringing binary options trading under the FCA’s remit. Since then, no action has been taken.

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