The market never sleeps! Brokers get warned and for the first time, traders start scamming brokers. Yeah, you heard that right! Unfortunately, they tried to do a scam using one of the most respectable brokerages in the world today – spoiler alert: they didn’t succeed. Keep reading for the full story and more from the BO universe.
Money Pass Scheme? Not When NADEX Is Watching
James Groves and his wife Georgiana Chiuc were banned for life from Nadex after trying to pull a money pass scheme by executing numerous non-competitive electronic transactions on May 10, 2016. Money pass means opening simultaneous buy and sell orders between 2 accounts, thus eliminating all possible risk. Nadex found that the husband and wife opened 28 trades on 2 separate accounts for a total of 1,451 contracts.
Apparently the husband, James Groves was “managing” the account of another person (whose name is not disclosed) and was losing deliberately on this account, generating a gain of more than $43,238.90 on the other account, which belonged to his wife Chiuc. So, actually the family couple were trying to scam another guy, not the brokerage. Well, I’m glad Nadex was vigilant and busted this scheme. The husband and wife were both permanently barred from trading with Nadex, their membership was revoked and each have been ordered to pay a fine of $500 to Nadex. On top of that, they will have to pay restitution and disgorgement for the improper gains. Source and full story: Finance Magnates
British Columbia Securities Commission Hard At Work!
The Canadian regulator British Columbia Securities Commission (BCSC) has issued several warnings regarding binary options brokers: GTOptions is an entity that claims to be based in Bulgaria and provides an online binary options trading platform but they are not registered to trade in, or advise on, securities or exchange contracts in British Columbia (BC). British Columbia residents should use caution when dealing with unregulated brokerages. Sources: BCSC Warning, SMNWeekly
The same type of warning has been issued against a binary broker that claims to be located in the Marshal Islands: RBinary Limited. Again, investors are advised to use caution. Sources: BCSC Warning, Leaprate
Binary Tilt is the last entry in this list of warnings issued by the British Columbia Securities Commission. The brokerage is operated by Chemmi Holdings Ltd and claims to be based in London. Binary options are considered securities in British Columbia and the brokerage is not authorized by the BCSC to trade in, or advise on, securities or exchange contracts in British Columbia. Sources: BCSC Warning, Leaprate
Italian Watchdog Targets Binary Robots
Italian regulator National Commission for Companies and the Stock Exchange (CONSOB) has warned against Binary Options Robot, an automated binary options trading software compatible with several brokers, some of which are regulated but others can be found on warning lists from financial watchdogs around the globe. Italy’s CONSOB reports that Binary options Robot is not authorized to use cold calling or to set up investment services by any means or method. Sources: CONSOB Informa 13/2017 (issued 10 April 2017), SMNWeekly
Kanto Bureau – Sharp As A Katana
The Kanto Finance Bureau of Japan’s Ministry of Finance warned against two binary options brokers: Speed Option and Royal Option as part of the agency’s attempt to limit unauthorized trading. The Japanese watchdog mentioned that registration under the Financial Instruments and Exchange Act is required for overseas operators if they want to offer financial instruments to residents of Japan. Source: Finance Magnates
The War Rages On
As long as binary options brokerages operate without proper licences and authorizations, the financial watchdogs of the world will continue to warn investors to say away. Unfortunately, people don’t seem to heed these warnings – if they did, we would probably see less scams and more happy traders. However, at some point I would like to see these watchdogs use other “weapons” than just words. Maybe a fine or two… come on, growl a bit, show some teeth. Bite!