The US Securities and Exchange Commission (SEC) has announced charges against an Israeli education provider called Tradenet Capital Markets Ltd. that provided day trading services to its clients with unlicensed investment activity, according to a notice published on its website.

The company has been fined $130,000 for ignoring the registration requirements designed to provide investors with the information necessary to evaluate securities transactions. The company also did not properly evaluate their customers from a suitability perspective.

According to the regulatory notice “Tradenet sold investors packages of materials that claimed to be for the purpose of educating investors about day trading but also paid investors a portion of net profits from simulated trades conducted in a funded trading account provided as part of the packages.”

As set forth in the order, Tradenet charged from $500 to $9,000 for the educational packages that included the simulated trading accounts.  According to the order, investors whose portfolios increased in value received payouts equal to a percentage of the simulated net profits, but if the value of the portfolio decreased by a certain amount, the funded trading account was closed.

Investors and those wishing to learn how to trade the markets must also be vigilant about the registration requirements and licenses of their education providers, in order to make sure they are being provided with accurate information and sound education materials.

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According to the latest notice from the Australian Securities and Investments Commission (ASIC), the regulator has acted upon two “Ponzi schemes” and the Australian Federal Court has made restraining orders against two companies believed to be engaged in such Ponzi activity.

According to ASIC, the AU government has arrested Matthew Alan Beresford and has frozen the websites and bank accounts of Maxwell Financial Services and Asset Capital Holdings, which were reportedly founded by Beresford. The regulator says that both companies were operating without an Australian Financial Services License (AFSL), although one of the companies claimed that such licensing was granted.

The regulator also believes that Mr. Beresford allegedly raised investor funds using both of the firms and that “a significant amount of money raised from retail investors has been dissipated.” The regulator has instructed all investors who may have lost money associated with this matter to report misconduct to ASIC via ASIC’s website.

The Federal Court of Australia has announced a decision to fine several CFD brokers after numerous complaints from retail investors who lost money trading certain derivatives products, namely binary options contracts. The fines relate to  AGM Markets Pty Ltd (AGM), OT Markets Pty Ltd (OTM), and Ozifin Tech Pty Ltd (Ozifin).

Customers of the broker lost a reported $32 million AUD while trading with the firms and filed numerous complaints with the country’s financial regulator – the Australian Securities and Investments Commission (ASIC), which first took action against the brokers in February 2018, when it suspended AGM’s license. AGM Markets will pay a fine of $35 million AUD while OT Markets and Ozifin will pay $20 million AUD each.

According to the news report, the three companies will have to initiate a refund process to the affected 10,000 trading clients. The Federal Court also appointed liquidators for all three companies, as they will not be able to continue to do business as licensed Australian entities.

Traders should remember to always manage their trading risks and formulate a risk management strategy when choosing to trade Contracts for Difference (CFDs) or any other derivatives. For help, check out our Tips for All guide on how to manage risk during market volatility.

The Cypriot financial regulator – Cyprus Securities and Exchange Commission (CySEC) has announced warnings against more unauthorized firms and suspected scams. The regulator posted a warning on its website on Friday to announce that the following firms do not have Cyprus investment firm (CIF) registration and in some cases are clones of previously uncovered scam companies.

The regulator indicated that the following firms are not licensed to operate a brokerage business in Cyprus, nor are they affiliated with a regulated entity:

Traders holding accounts at these companies or those interested in trading with them should take extra caution as their funds may be at risk. Before making a decision to trade, investors should always check the status of their broker.

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Italian financial regulator CONSOB is on a roll – continuing its efforts to protect Italian citizens from possible scams and fraud by blocking the websites of unauthorized firms using the so-called “Growth Decree”. In its press release from October 16th, the regulator indicated that it has taken action against the following firms:

Traders should take note of the new regulatory actions to make sure their funds are not at risk if they had dealings with such firms and use the Check Your Broker directory to review the status of their online broker.

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Italian financial regulator Commissione Nazionale per le Società e la Borsa (CONSOB) announced the blocking of more unauthorized firms as part of its well-established campaign of protecting investors from scams and possible fraud related to online brokerages and trading.

The regulator announced that the following companies have been blocked in Italy by local Internet Service Providers (ISPs) as part of the ‘Growth Decree’ enacted since the summer of 2019:

The total number of firms already blocked by CONSOB, including the companies listed above now stands at over 300, highlighting the scope of the problem that both online brokerages and regulators are dealing with. Traders are always encouraged to check their broker prior to opening a trading account to make sure they understand all the risks. Check Your Broker today!

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The Cyprus Securities and Exchange Commission has announced a fine for Cypriot Investment Firm (CIF) Royal Forex Ltd. stemming from possible violations of the Investment Services and Activities and Regulated Markets Law of 2017. The regulator indicated that a settlement was reached for €270,000 in regard to the matter.

CySEC indicated that the enforcement action took place as a result of an investigation of the broker’s compliance between January 2018 and December 2019 and after an onsite inspection of the broker’s operations in March 2019. The regulator specified that the broker was found to be in violation of:

1.Article 5(1) of the Law regarding the requirement for CIF authorization.

2.Article 22(1) of the Law as to the authorization conditions of articles 17(2) and 17(5)(a) of the Law, regarding the organizational requirements with which a CIF is required to comply.

3.Article 24 of the Law regarding conflicts of interest.

4.Articles 25(1) and 25(3) of the Law regarding the general principles and information to clients.

It is not clear if the broker will continue to operate under the CySEC regime going forward as it was recently promoting its services across Europe and previously held a football team sponsorship in Italy.

The Cyprus Securities and Exchange Commission (CySEC) has announced that several online brokerages have had their Investors Compensation Fund (ICF) membership withdrawn. As such, clients trading with these firms are losing the protection by the ombudsman regime in Cyprus, where the companies were registered as Cyprus Investment Firms (CIF), yet can still file claims against the companies if the trading or other operations in question happened before the withdrawal of ICF membership.

The regulator noted that “accordance with paragraph 6(3) of the Directive, the loss of ICF membership status does not mean loss of rights of covered clients to receive compensation in relation to investment operations carried out until the loss of membership status if the conditions for compensation are fulfilled pursuant to the Directive, nor does it obstruct the initiation of the compensation procedure for covered clients.”

Previously this year CySEC withdrew the Cyprus Investment Firm (CIF) authorizations of Whotrades Ltd and MGTM Financial Services Ltd.

Traders are advised to always check the regulatory status of the broker they wish to trade with prior to depositing funds to ensure they are protected.

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The Financial Conduct Authority (FCA) of the United Kingdom took more steps this week at addressing the issue of online financial scams and fraudulent companies which often operate clones of legitimate brokerages for illegal activities. A review of the Warnings page of the regulator’s website reveals more than 20 new posts regarding clones of officially regulated firms, as well as known scam companies.

Among the scam firms identified by the FCA are ValueFX, The Wealth Core, Migotrade, Clear Save, British Bonds Company, Easy Money Loan, 24Cash Lender, FUNDIZA, Finance Ever, Online MarketShare, AU-F/AUF Limited. Furthermore, the following clones of FCA regulated entities have also been identified, including Forextime UK Limited, Sweet Loanz (Trusted Finance Ltd), Carmignac Gestion Luxembourg S.A., and others.

The regulator also warned that unknown individuals have even turned to clone the websites of prominent international banks, including DBS Bank, Scotiabank, and Nomura Bank.

We once again urge all traders to carefully evaluate and check the information on their broker’s website and materials to ensure they are not at risk of losing their funds to possible scammers of fraudulent services. Check Your Broker today!
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Belgium’s Financial Services and Markets Authority (FSMA) issued a warning on Monday against companies selling, trading, and training products related to forex, contract for differences (CFDs), and cryptocurrencies using so-called multi-level marketing (MLM) structures.

The regulator specified that the “sale of such trading and training software mostly takes place via a pyramid structure. The term generally used for this technique is ‘MLM’ (multi-level marketing), in which consumers are given incentives to bring in new members. In exchange for doing so, they receive compensation in the form of a commission or discount on the price of the software package or subscription price.”

FSMA noted that it “has observed that such MLM networks are very active on social media via numerous (private) groups whose only purpose is to promote a particular MLM and to recruit new members. It is worth noting that these schemes mainly target a young audience, who are very active on social media, where all sorts of photos circulate showing young people seemingly swimming in riches. The message is that everyone can afford this kind of lifestyle if they bring in enough new members and make the right investment in the software being promoted.”

The regulator also warned that offers of CFDs and forex via the internet are very risky and vulnerable to fraud: anyone who invests in CFDs or forex runs the risk of losing all the money invested. The possibility of loss is much higher than the possibility of gain: surveys by other European supervisors conducted among investors show that as much as 75% to 89% of investments in derivative products, such as forex products, are loss-making.

Both Cyprus and Italian authorities have been taking quick steps lately to stem the spread of scams and fraud among the online brokerage industry and have now issued new public notices regarding blacklisted firms. The latest actions include the blocking of unauthorized websites in Italy by local Internet providers and the blacklisting of firms by Cyprus’ Securities and Exchange Commission.

Traders should take caution if they are approached and offered services from the following firms. Companies blocked in Italy include:

As for Cyprus, the firms that have falsely stated their registration and licensing as a Cypriot Investment Firm (CIF) and have been flagged by the regulator:

We encourage all traders to first thoroughly check the company you plan to trade with before sending funds or opening an account. To confirm registration or licensing you can simply search regulators from our comprehensive list and Check Your Broker directory.

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With online financial scams affecting nearly all countries, the US financial authorities at the The Commodity Futures Trading Commission (CFTC) have issued a press-release charging different companies with making false representations regarding their registration and/or authorization with the US financial regulator.

The regulator pointed out that its latest actions are “examples of the CFTC’s efforts to aggressively root out fraud and bad actors involved in our markets,” said Division of Enforcement Director James McDonald. “As these actions show, the CFTC will act decisively to prevent false claims of CFTC or NFA registration.” The authorities stress that the public should verify a company’s registration with the Commission before committing funds. If unregistered, a customer should be wary of providing funds to that entity. A company’s registration status can be found using NFA BASIC. More information can be found at cftc.gov/check.

The companies charged with false claims are: Bitfx24option.com, Fidelityfxtrade.com, Granttradefx.com, iMarketsserviceFX.com, Toptradecapitalfx.com, Westtechtrade.com, Westintrade.com, Yobcryptotrade24.com, Zenithoptionstrade.net, Zenithtradermarkets.com, Sumtrades.com, Goldman Global Investment Funds Ltd., Merryl Morgan, Swiss FX Trade, Ultracapitals, Vertex Holdings Limited, United Financial Limited, DST Clouds International Limited, Bullet Capital & Contract Occurrence Management Merchants, ESOM.

Traders who may have been victims of the above firms are encouraged to contact their local financial regulators for assistance.

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The UK’s Financial Conduct Authority (FCA) has begun to flag unauthorised firms which provide educational services to Forex traders. Previously, the regulator issued warnings specific to scam or fraudulent companies and those that are not authorised to provide trading services within the UK. Since online scams using social media are becoming more prevalent around the world, regulators are beginning to go after such scams as well.

The FCA has specifically identified a website – so-fx.com, the company primarily offers forex trading educational courses for both beginner and advanced traders. The platform along with its owners and employees are also active on Instagram and Facebook with thousands of followers. This company looks to be getting most of its exposure through social media and is promising traders unreasonably high profits from Forex trading.

Traders and investors should take caution if dealing with anyone with these details:

Telephone: 023 8017 8743, +4447771606768

Instagram account: https://www.instagram.com/georgelinf/; @georgelinf; @sofx;

https://m.facebook.com/sofxuk

Website: https://so-fx.com

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The US Commodity Futures Trading Commission (CFTC) has issued a press release today indicating an update to its ‘Red List’ – a directory of unauthorized firms about which the regulatory body issues warnings and alerts to investors. The regulator has informed the public that it added 22 new firms to the ‘Red List’ as the firms do not currently hold RFED and broker dealer licenses with US regulatory authorities.

The regulator indicated that a firm is added to the RED List when the CFTC determines, from investigative leads and questions from the public, that it (i) is not registered with the Commission and (ii) appears to be acting in a capacity that requires registration, such as trading binary options, foreign currency (forex), or other products. The Commodity Exchange Act generally requires intermediaries in the derivatives industry to register with the CFTC.

An “intermediary” is a person or firm that acts on behalf of another person in connection with trading futures, swaps, or options. Depending on the nature of its activities, an intermediary may also be subject to various financial, disclosure, reporting, and recordkeeping requirements. There are some exceptions or exemptions where an intermediary does not require registration.

The list of new unauthorized firms includes Forex and binary options trading companies:

RED List CFTC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The regulator also indicated that it has updated the Red (Registration Deficient) List with new features “that improve its usability and effectiveness in deterring illegal conduct.” Investors and traders can check out the new Red List and search for unauthorized firms here.

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The United Kingdom’s financial regulator, Financial Conduct Authority (FCA), has just warned of another clone of ETX Capital, which has been soliciting customers under the guise of being associated with the regulated, parent company. The regulator stated, “fraudsters are using the details of firms we authorize to try to convince people that they work for a genuine, authorized firm.”

As pointed out by our colleagues at Finance Magnates: “unlike the previous FCA-flagged clone of ETX Capital that was exactly impersonating the authorized broker, this new fraudulent platform created a genuinely looking platform and is only using the name of the authorized company.” Traders should heed these warnings and confirm the registration and authorization of such companies before opening an account.

 

The clone firms details are:

Prime Capital Invest (clone of FCA authorized firm)

Telephone: +447537126270, +447537129443

Website: https://primecapitalinvest.com/

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