Our site uses cookies. By continuing to use our site you are agreeing to our cookies policy. ACCEPT AND CLOSE Accessibility Links Skip to content sunday september 18 2016 Search The Times and The Sunday Times Business INSIDE STORY He wins, you lose in binary casino Danny Fortson September 18 2016, 12:01am, The Sunday Times Elijah Oyefeso signs up clients for a £107 a month fee to receive ‘signals’ from him about their investments in binary options tradingPHIL YEOMANS Share Save The smell of fried chicken filled the air as Elijah Oyefeso, a 22-year-old millionaire, star trader and social media sensation, opened his front door. Oyefeso had agreed to an interview with The Sunday Times yet appeared surprised by the visit, clad as he was in only a shirt and a snug-fitting pair of boxer shorts. “Come in, come in. Give me a second,” he said, before disappearing to eat and locate a pair trousers. I had come to meet this tycoon who, if his Twitter and Instagram feeds are to be believed, leads a fabulous life. One highly produced YouTube clip shows Oyefeso giving his mother a £230,000 Rolls-Royce Wraith. In another he gives a tour, styled on MTV’s Cribs, of his six-bedroom house in Chilworth, a moneyed village near Southampton. His story is irresistible: a teenager who grew up on a south London council estate and turned his student loan into a fortune. Oyefeso, by then fully clothed, claimed he now pulls in between £60,000 and £90,000 a month trading on tiny moves in currencies, stocks and commodities. “Not boasting, but I think I opened the gate for people to start trading,” he said. “For someone to see me doing it and making money out of it, it motivates them.” Oyefeso is a sparkly lure into a shadowy world: binary options trading. The industry’s biggest companies sponsor Premier League football clubs and have celebrity endorsers such as Boris Becker. Yet many of the tens of thousands of Britons lured in with promises of instant riches end up with nothing or, worse, in debt. City of London police said fraud complaints against binary companies had spiked “dramatically” in recent months. The average loss: £20,000. “It is the latest and perhaps fastest-growing iteration of investment fraud,” said Andy Fyfe, the force’s financial crimes specialist. “These companies are luring a much younger audience of would-be investors because they are advertised on social media, like Instagram. We’ve never seen that before.” In the three months to September, the Action Fraud reporting centre received 245 fraud complaints about binary options trading, more than in all of 2014. Oyefeso, who is not accused of wrongdoing, is an adept recruiter. His flashy lifestyle serves as a perfect advertisement for those hoping to make a quick buck with binary trades, which are simple all-or-nothing bets on currency and stock movements. Via his company Dream Comes True (DCT) Trading, a feeder portal for the big operators, Oyefeso reckons he has personally coaxed up to 7,000 people to sign up. Barely credible success stories such as his are the first link in a global chain. The industry is centred in Israel but many companies register in Cyprus, an EU member, because it provides a “passport” to operate across Europe. Crucially, they are regulated only by the island’s financial watchdog, the Cyprus Securities and Exchange Commission, not the authorities of the countries where they operate. This set-up means much of the sector resides in the blind spots of international financial regulation. Some countries have already begun to put up the shutters. Watchdogs in America and France banned Banc De Binary and 24Option respectively, two of the industry’s largest companies, this year. Australia and Canada have issued warnings about the industry. In Britain, one of the most lucrative markets, these companies operate unfettered. Dozens offer trading but only seven, which have “key equipment” such as servers on British soil, are overseen by the Gambling Commission. The Financial Conduct Authority does not regulate any. Binary options are alluring in part because of their simplicity. It works like this. Sign up online to use a provider’s online trading platform and within minutes you will receive a call from a pushy salesman. Typically, companies require a minimum deposit of $250 (£190). Once you have signed up, you are passed to a “broker” who will advise you on what to invest in and when. These “investments” are always the same: simple bets that the value of a currency, such as the US dollar against the pound, or of a stock such as Apple, will rise or fall within a certain timeframe. This can be as little as 30 seconds or as long as a few days. Bet right and you win between 30% and 80% of your wager. If you are wrong, you lose 100%. Generally, people are guided through the process by brokers, who are described as markets experts but need no financial qualifications. They are trained, however, in aggressive sales tactics. Nick Dunsford knows how easy it is to get sucked in. The 50-year-old, who asked that his name be changed for this article, was getting by doing contract work after being made redundant by his local water company. He had been thinking about getting into trading for months. One night last year, he clicked on a link that took him to Banc De Binary. His goal was simple. “I was quite happy to play with £1,000. I thought, if this works and I can make my money work a bit better for me, I can have a nicer life,” he said. “It was the biggest mistake of my life.” Over the course of a year, Dunsford lost £76,000 — most of his life savings. How? His first trades worked. He started to make money. As his balance grew his broker needled him to put in more. “He said, ‘You can only make real money if you put more in,’ ” said Dunsford. It appeared to be working. Banc De Binary even offered a “bonus” of several thousand pounds to bolster his account. These companies lure younger would-be investors by advertising on social media. We’ve never seen that beforeAndy Fyfe, financial crimes specialist Bonuses are a key part of the industry and, critics say, are particularly dangerous. Brokers are quick to offer them and many clients accept: it’s free money. But in the fine print lies the catch. In Dunsford’s case, when he accepted the cash, he had unwittingly agreed to a harsh condition. He could take his money out only after he had traded the total balance — his cash plus the bonus — 20 times over. It is a standard tactic. Say a client has £1,000 in their account and accepts a £1,000 bonus. They must then do trades worth £20,000 before they can make a withdrawal. Often clients lose everything trying to hit the threshold. If they try to take money out before, they receive a fraction of the balance. “Every company offers bonuses,” said Oyefeso. “People don’t realise what it means until after. That’s why people think it’s a scam.” Dunsford’s trades began to sour. He threatened to pull out what little money he had left. “Every time, my broker gently talked me out of it. They were very, very good at that.” After a last disastrous trading round, he started chargeback proceedings with his credit card company. Banc De Binary, which had been offering him fresh bonuses to trade out of the hole, went silent. “Every trade I made was 100% on their recommendation,” Dunsford said. “This money is everything to me. When I think about it, it takes me deep. I have been to the doctor about it.” Banc De Binary declined to comment. As it is not regulated here, it is unclear what infractions it could be accused of making. Dunsford has reported the company to Action Fraud, as have two other people who spoke to The Sunday Times. Between them, they have lost more than £125,000. They are the tip of the iceberg. Gabriele Giambrone, a London lawyer, says he has case files of more than 3,000 individuals who claim they have been defrauded by binary companies. He said: “This is a small fraction represented by a small firm. Who knows what the true scale is?” Fyfe of City of London police is not surprised. “I would never criticise someone falling victim. We must not underestimate how good these people are as salespeople. Their skills are phenomenal,” he said. Twelve days ago Banc De Binary, with its roster of 250,000 clients in 80 countries, was unveiled as a sponsor of Southampton FC. The Premier League outfit said the tie-up was a natural fit because Banc De Binary’s “values are very much aligned with those we have at the football club”. The deal came just six months after Banc De Binary and its founder, Oren Laurent, agreed to a US ban and an $11m fine to settle charges that it illegally solicited business. Neither the company nor Laurent admitted wrongdoing. After The Sunday Times raised the issues of the fine and aggrieved British clients, Southampton FC ended its partnership with Banc De Binary on Friday, removing a sponsorship press release from its website. Which brings us back to Oyefeso. Banc De Binary is one of two companies to which his site sends recruits. The other is 24Option, which last year signed up tennis star Boris Becker as a celebrity endorser and has more than 100,000 global customers. Last month it was banned by France’s regulator, the AMF, for failing to act in “an honest and fair manner in the best interest of its clients”. The company, which is owned by a private firm based in Cyprus, called Rodeler, presents itself as a neutral trading platform whose army of brokers help its clients make money. The company told The Sunday Times via email that it does not benefit when traders lose. In a gambling analogy, it is not the “house”. That function is served, the company said, by Richfield Capital, an investment company registered in Belize. Yet in the fine print of 24Option’s website, it states that Rodeler “belongs to the same group of companies with Richfield Capital”. In other words, 24Option, Rodeler and Richfield are all one and the same. If traders lose, they ultimately win. Against those odds, how to explain Oyefeso’s run of what he says is more than 36 consecutive months of profitable trading? He may simply be a gifted trader. In our interview, however, he revealed that much of his riches come not from his analytical prowess but from the fees he collects from people who sign up — at £107 a month — to receive trading “signals” from the man himself. Even if only a small fraction of his 100,000 followers on Instagram and Snapchat buy into the dream, it’s a nice little earner. “Yeah,” Oyefeso said with a thin smile. “It’s not bad.” Share Save Comments are subject to our community guidelines, which can be viewed here. 2 comments + Follow Post comment PREVIOUS ARTICLE Guinness owner to slash jobs at HQ Previous article NEXT ARTICLE Hammond needs to help us get our mojo back Next article BACK TO TOP GET IN TOUCH Contact us Help The Times Editorial Complaints The Sunday Times Editorial Complaints Place an announcement Classified advertising Display advertising The Times corrections The Sunday Times corrections MORE FROM THE TIMES AND THE SUNDAY TIMES The Times e-paper The Sunday Times e-paper Times Currency Services The Sunday Times Wine Club Encounters Dating Red Box Times Print Gallery The Times Archive Times Crossword Club Sunday Times Driving Times+ The Sunday Times Rich List Insider City Guides Good University Guide Parent Power © Times Newspapers Limited 2016. 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Binary options: the greatest side-hustle for the under-30 crowd this decade. Any punk can go on YouTube and convince some rubes to sign-up for signals or a "training course" on how to supposedly trade them successfully.
When he encourages you to pay for his get-rich-quick course with your credit card. A class action lawsuit against him can also be a subtle tell...
Live in Canada, not a lot of Con Men here but once in a while you get those door-door energy men asking you to switch your default plan to a more efficient one. The trick they use is they'd ask you look at your energy bill which gave you the impression they were working for the government. They'd target tenants in buildings that didn't include hydro or electricity. Never seen them since I stopped paying for it.
Are you that surprised? The average Joe doesn't know his right hand from his left if it comes to trading... or anything where you need a little bit of a brain for. There are still people getting screwed by 'brokers' from Hong Kong that say they should wire them thousands of dollars to benefit from some tiny stock nobody has ever heard from... I just shrug my shoulders when I hear that nowadays...
Can one even spot a conman if they try? They're everywhere. In the UK alone there have been one million complaints about financial frauds between January and June this year and one scam is committed every fifteen seconds. Those people look like a normal person, either because it comes natural to them or they've deliberately taught themselves to appear normal.
When Forex started, it was very much the same, dealers were controlling their own data, they knew people were so dumb by advertising "NO Commissions" they would flock to them, people did get "flocked", people so insanely stupid rather pay 3 pips plus for free "data" and no commissions than pay less than half that on one tick spread and small commission trading currency future. And if there was some sapp who was making money trading, they never saw any of it being sent back to them, dealers never give them their money. Let's face it, when Greed bug appears, people throw common sense away, they refuse to think of them shutting themselves away for 10,000 hours to learn how to make a Trading Plan. It is like diets, Americans are the fattest people overall on the planet, yet when a new diet appears, so many will make the thin people ungodly rich who are selling it. You want to lose weight? Stop eating so damn much, easier said than done, my last 75 lbs are a bitch to get off, and as you get nearer to 60, body slows down, but it still comes down to getting off sugar which is like cocaine, same color and legal, eat protein and veggies. When you go to grocery, Don't even shop anything that in middle of the store, meats and veggies are towards the walls of the store, shop there and check out. You want to get to 180lbs, you have to eat for 120lbs person to pull down the weight. I know people are working to find next best scam of trading, they lay awake to find some dumb way to advertise get rich quick scheme and has to be easy that a four year old can do it.
I think those who get conned, for whatever reasons, do want to be conned unconsciously. wenever they have sorted themselves out psychologically, it then becomes hard for them to be conned.