The Securities and Exchange Commission is cracking down on internet marketing scammers using infomercials with a $4.1 million action against one company taken on Thursday related to binary options sales while seeking penalties, returned funds and permanent injunctions against another.
The securities regulator is also issuing a warning on fraudulent internet investment pitches to retail investors through a video series it is sharing on its website and on YouTube, with an introduction from SEC Chairman Jay Clayton.
The agency issued an Investor Alert about “can’t miss” investment opportunity invitations either sent by email or accessed via online videos designed to swindle users.
The new SEC complaints charge 10 individuals and two companies involved in the allegedly fraudulent schemes using videos aimed at retirees and other retail investors that promise big returns if they opened free or secret brokerage accounts.
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The accounts involved a type of high-risk options contract that is basically a yes/no bet, known as a binary option.
The con resulted in investors, expecting to make money through these accounts, getting swindled out of “tens of millions of dollars through these marketing campaigns,” the SEC charged.