Service NL is cautioning the public that two companies, operating as Porter Finance and Dalton Finance, have been soliciting residents of Newfoundland and Labrador to trade in binary options.
Service NL said in a news release, no company is registered to trade in binary options in any jurisdiction in Canada.
It describes binary options as wagers as to whether the value of an asset will increase or decrease within a specific period of time.
"Investors are asked to bet on the performance of a currency, commodity, market index or stock within a very short period of time — often within a few minutes. The investor is then advised that they have either received a payout or lost their investment. Payouts may be virtual, meaning that monetary gains are depicted online as existing in an account held by a company. Investors often subsequently learn that their 'gains' are inaccessible and that the accounts do not exist," the news release warns.
If contacted by anyone purporting to represent a company trading in binary options, Service NL advises the public not to send money or provide identity details such as credit card, driver's licence or passport information.
The public is also urged to notify Service NL by email at email@example.com, or call the province's financial services regulation division at 709-729-2596.