Unregulated brokers and scam-cloned sites: the global hunt goes on


As the online retail forex and binary options industries keep receiving new entrants on a daily basis, the task of regulating all the participants and especially the plethora of brokers becomes even more challenging and daunting. At the same time, the fact that this a lucrative industry with its regulation being fragmented and executed through various national agencies and jurisdictions across the globe, makes it susceptible and vulnerable to a great number of crooks trying to trick unsuspecting traders. This is done either by cloning the sites or identities of existing entities and tricking people to part with their money which then vanishes into thin air, or by claiming to be registered or authorized to operate in a certain jurisdiction when in fact they are not, thus tricking traders to trust them under false pretenses, i.e. misleading them to believe that they are dealing with a company that is checked and approved by an overarching authority and thus are safe and reliable, or by employing marketing and aggressive advertising methods which are also not allowed and misleading, again trying to lure customers through false claims.

We have reported on cases of all the above types of incidents in the past, but are today returning to the issue as regulatory and watchdog agencies across the globe through relevant announcements they have issued in recent days, appear to have embarked on yet another campaign, albeit uncoordinated, in order to crack down on crooks. It is important that the national regulators continue and even intensify their efforts in this regard as this will not only safeguard the rights of traders, but also will act as a deterrent to all those planning to try to deceive people in the future through online trading and also will help enhance the image and reputation of the industry as a whole.

So, let us have a quick recap of the latest warnings against brokers for various reasons, which have lately been issued by the competent authorities worldwide. The Canada, the pertinent authorities in two provinces, namely British Columbia and Saskatchewan issued warnings against Tradelogic.com and Tradequicker.com, in respect of being unregistered and unauthorized to provide financial services in Canada or those provinces. Tradequicker also featured on the new list announced by the French regulator AMF, which includes a total of 79 binary options brokers on it. Particularly for Tradequicker French residents were warned that the broker is involved in aggressive advertising tactics that must be ignored and that it is unauthorized to execute financial transactions in France.

Moving on to Belgium, the local regulator FSMA issued a list of 6 brokers, which are not regulated, registered or authorized to provide binary or any other financial service in the country. This list is supplementary to the list already in place and the relevant announcement urges Belgian citizens and residents not to respond to the advertising or make any deposits with brokers on the list. Similarly, in Luxembourg, the Commision de Surveillance du Sector Financier issued warnings against brokers Royal de Bank and FutureMarket, both of which allege to have offices in the country when in fact they are not registered or allowed to sell financial products in Luxembourg.

In neighboring Switzerland, the Swiss Financial Market Supervisory Authority (FINMA) has added on its “black list” and warned against two unauthorized entities falsely claiming to be Zurich-based. The first is Tradmaker, a broker offering CFDs, Forex and Bitcoin trading, while the second is iStock Capital, which was found not to exist at its given address.

Last but not least, the UK’s Financial Conduct Authority (FCA) has discovered two more clone firms, guilty of the identity theft of legal corporations. The first case is that of City Equities Ltd, which on its site (www.cityeq.com) claims to have over 25 years’ experience and a license from 15 regulatory bodies, when in fact it is plainly ripping off the name of City Equities Limited with which it has no association. The second case is that of Fredric & Formby, Fredric and Formby and Fredericks Ltd, with the persons behind this scam choosing to target their victims via phone calls and an email address ([email protected]), hiding behind a stolen identity.

As always, we would urge all traders, but especially those new in the industry and thus less experienced ones, to be very careful when choosing their brokers as crooks will always be vigilant and lurking about. It is always wiser and safer to trade through well established, regulated brokers with a solid track record that ensures their credibility and reliability.