The FinancialThe United Kingdom’s financial regulator, UK Financial Conduct Authority (FCA) has announced actions against several firms registered in Cyprus for illegally soliciting UK residents using unauthorized celebrity endorsements. The regulator estimates that UK investors have lost hundreds of thousands of pounds in these investments. A number of customers are known to have lost more than £100,000 to the schemes.
The firms in question include Hoch Capital Ltd (trading as iTrader and tradeATF), Magnum FX (Cyprus) Ltd (trading as ET Finance), Rodeler Ltd (trading as 24option) and F1Markets Ltd (trading as Investous, StrattonMarkets and Europrime). The firms allegedly used unauthorized celebrity endorsements on social media as part of their marketing. The firms used social media and web pages carrying fake endorsements from celebrities to entice consumers into the scams involving CFDs.
The orders require the four companies to stop selling CFDs to UK customers, to close existing positions with UK customers, to return UK customers’ money and to notify UK customers of the FCA’s action. The Cyprus based firms – which were permitted to operate in the UK through a method known as passporting – must now cease all regulated activities with UK consumers.
We remind all traders and investors to be wary of unsolicited offers and claims by anyone on social media to invest or trade financial products, including Forex and CFDs and to check such offers for authenticity. For more information on how to avoid such possible scams, check out our Guide “How to Avoid Investment Scams”.