Binary Options Firm Blamed Hackers For Lost Cash
-Reclaws International (reclaws.com)
A dodgy financial company that claimed to trade in binary options blamed hackers when money disappeared from customer accounts.
But insolvency investigators discovered Eclipse Finance really offered customers unrealistic high returns with false and misleading claims and found no evidence of binary options trading.
Binary options is a way of fixed-odds betting on the movements of financial markets – with a pay-out for guessing correctly and nothing for getting the call wrong.
Eclipse was a scam set up in a London ‘virtual office’ and that lied about the chances of winning to attract online customers from all over the world.
Insolvency Service investigators spoke to investors and found none won, but all had losses averaging £50,000 each. Total losses reported to fraud detectives added up to more than £600,000.
High pressure sales
The High Court was told by insolvency investigators that “potential investors were subject to high pressure sales tactics with misrepresentations being made as to the returns that would be made on investments.
“Trading was then apparently carried out with investor funds without authorisation and monies were removed from investor accounts without authorisation.”
The company blamed the losses on hackers – twice. However, the investigating team could find no evidence of computer system intrusion.
Other investors complained that their accounts were drained of cash without their permission and no one at the company would explain why and that most attempts to contact the firm went unanswered.
Irshard Mohammed, the investigation supervisor at the Insolvency Service, said: “Eclipse Finance attracted investors with the promise of high returns but these to be unfounded and investors suffered heavy losses as a result.
“The Financial Conduct Authority have warned consumers of the high risks of binary options trading, but in this case, no evidence has been found that the company engaged in such trading. Instead they used the false promise of high returns to attract investment and then disappeared.
“These winding-up proceedings show that the Insolvency Service will use the weight of its powers to take firm action against companies that operate in such an unscrupulous way.”
The High Court wound up the company, which was based in Barking, East London, in the public interest.