Regulators are Issuing Warnings all Around the World!
From Cyprus to Japan and from Italy to the US regulators are working hard to warn potential traders for unauthorized or fraudulent binary options brokers and services. Traders are losing significant amounts of funds and complaints are piling up which has led to this latest round of warnings. The latest development is regulators joining hands to warn and inform traders worldwide. The reason? Clones and robots are starting their own war, claiming a new round of financial victims.
Joint cooperation between CySec and Belgium’s FSMA forces Cyprus based binary options brokers to ask for FSMA’s approval prior to marketing towards Belgians. Any broker offering services in Belgium must create and publish documents informing about the offered investment and involved risks. Brokers not submitting to this law or not being approved by FSMA are not allowed to continue providing any financial services in Belgium and only the latest sign of CySEC’s growing influence on EU binary options regulation.
Huge Losses Registered By Global Traders
French AMF has gathered a pile of complaints over the past year. The complaints have increased significantly and add up to a loss of roughly 6 million Euros. On an individual basis losses range from 100 up to 800,000 EUR per individual. Aggressive marketing methods of shady brokers seems to be the number one reason and the focus of AMF’s ongoing battle. Currently, AMF can only make public their reports and warn traders of the risks of loss.
Clone firms have also become a threat to traders, warns FINMA, the Swiss Financial Market Supervisory Authority. The clones operate under stolen, copied and misleading names using fake addresses. In addition to the clones, robots are claiming victims too. The brokers involved may also offer portfolio management, copy trading and Algo Robots according to ISA, Israeli Securities Authority, services that need need to be licensed. ISA is at least taking it seriously, they will now require managers to become licensed in Israel.
Japan is also hunting down brokers, FSA is constantly adding to their long black-list of brokers. Their biggest problem is that brokers are offering 60 second trading which is illegal in the country. Overall, the regulators are reporting fraudulent activities and issuing warnings. Unfortunately, in some cases, like in the French AMF warning, people had already lost millions and the report was based on hundreds of complaints coming in over a full year. In conclusion, the warnings might save some but there will always be victims, unless you take your own precautions.
More and more brokers are being warned by different authorities; Italian CONSOB, Japan’s FSA, CySec and recently the Idaho Securities Bureau. Rarely do we hear about warnings issued in the US but the Idaho regulator has published a checklist of precautions for investors That is good for anyone wanting to trade binary options. They advise traders to make sure offered products are registered with CFTC or SEC ( or your local agency if not in the US) and to be critical when receiving cold calls. Simple precautions that can save you lots of money and frustration.