The UK FCA has banned four Cypriot firms from offering high-risk financial bets after they used unauthorized celebrity endorsements to promote scam investments.
June 1 2020 | AtoZ Markets –The UK Financial Conduct Authority (FCA) has taken action to stop four Cypriot investment firms from continuing to offer high-risk contracts for difference (CFDs) to UK investors.
FCA bans 4 CFD Cypriot firms
The UK watchdog today explains that these off-shore firms were enticing UK clients into large investments through the use of unauthorized social media celebrity endorsements. The 4 brokerage firms 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).
On the UK part, the FCA told these brands that they are no longer allowed to solicit or take on new clients from the country anymore, while relations with the existing clients must be terminated, and they must be allowed to close their positions and withdraw their funds.
The FCA estimates that UK investors have lost hundreds of thousands of pounds in these investments, while none of the aforementioned brokers have any actual presence in the UK. It further accuses their operatives with not providing customers with sufficient information as to the nature of CFDs products, while some were pressured into making highly leveraged-bets in CFDs referenced cryptocurrencies, forex, shares and indices.
Mark Steward, FCA Executive Director of Enforcement and Market Oversight, said:
“The FCA has removed passporting rights for these firms which effectively stops them from continuing to provide these types of products in the UK. We welcome the further action taken by the CySEC. The FCA’s investigations into the sector are continuing.”
CySEC suspends 4 forex brokers on FCA Request
Following the FCA’s action, the Cyprus Securities and Exchange Commission (CySEC) has fully suspended the regulatory authorizations of Rodeler Ltd and Hoch Capital Ltd and partially suspended the licenses of Magnum FX (Cyprus) Ltd and F1 Markets Ltd.
The CySEC action means that Rodeler Ltd and Hoch Capital Ltd must cease all regulated activities entirely. Magnum FX (Cyprus) Ltd and F1 Markets Ltd, may only provide investment services to their existing non-UK-resident clients, but can’t promote their products anymore or take on new clients.
Think we missed something? Let us know in the comment section below.