CONSOB orders Hoch Capital Ltd to stop marketing its products to Italian investors due to allegations of breaching local and EU regulations. Is Hoch Capital Ltd a Scam or Reliable firm?
16 December, 2019 | AtoZ Markets – CONSOB, the Italian securities regulator, today ordered Hoch Capital Ltd, a licensed Forex & CFD broker CySEC, to cease operations in the country. CONSOB said the precautionary measure was necessary to protect Italian investors from Hoch Capital Ltd. The Limassol-based broker repeated its violations despite measures adopted by CYSEC.
Is Hoch Capital Ltd a Scam or a Reliable firm?
Hoch Capital is no longer authorized to provide investment services in Italy. The decision also prevents the Cypriot intermediary from soliciting new customers or continuing its current relationships with Italian customers. However, the company will, therefore, have to close the accounts of its Italian traders.
The regulator said it made the latest decision under article 7-quarter, paragraph 4 of the Consolidated Financial Law (TUF). This legislation allows CONSOB to order investment firms and brokers operating in the country to cease their activities. That is after having informed the competent authority of the Member State.
According to the regulator, CONSOB made several complaints to the Cypriot Securities and Exchange Commission regarding its misconduct. Still, Hoch Capital Ltd also continued to violate the laws. The allegations refer to non-compliant practices by the brand operator, including the promotion of difference contracts (CFDs) to non-professional investors. CONSOB said:
“The complaints refer to circumstances such as the total loss of the invested capital, the classification of the investor. And the exercise of pressure by the staff of the company was to make additional deposits.”
CONSOB accuses Hoch Capital of violating the EU Directive
The company has also violated the EU directive, which imposes negative account protection, ensuring that customers cannot lose more than their trading stake. Besides, CONSOB accuses Hoch Capital staff of pressuring its customers to deposit more funds. But current rules prohibit bonuses and other incentives that may have encouraged over-trading in recent years. CONSOB said:
“CONSOB resolution is a precautionary measure concerning the activity of the Company in Italy. And the authorization of the company for the cross-border activities in Italy has not been withdrawn. The prohibition applied by CONSOB will remain in force until no evidence is obtained from CySEC.”
This is the first time that CONSOB has exercised its power to prohibit a company from marketing its products to Italian traders.
AtoZ Markets team has contacted Hoch Capital Ltd regarding this matter. We will keep you posted as soon as we receive any quote or comment from them.
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