Regulators Cracking Down On Market Practices, Scams And Fraudsters

CySEC continues to crack down on non-authorized and regulated brokers alike. Their latest move is a fine against Novox Capital Ltd. Novox Capital is a licensed Cyprus Investment Firm legally operating forex, CFD and binary options brokerages. The fine, 175,000 euros, was delivered in 6 parts. The largest portion, 70,000, was for offering and providing investment advice without authorization. The remaining portions, nearly evenly allocated, were as follows:


Inadequate internal controls over 3rd party advertising.

Improper outsourcing to call centers and customer service.

Not acting in the best interests of clients.

Misleading and improper 3rd party advertising.

Providing improper or misleading info to clients.


The nature of the fines is promising although the amounts may be too low to matter. CySEC is trying to make the brokers take responsibility for their operations and not allow pushy call centers and shady marketing guru’s to take advantage of the public.


Titantrade has made the news again, this time with a warning from Belize. Belize says the broker is fraudulently claiming to hold a Belize IFSC (International Financial Services Commission) license when in fact it doesn’t. The IFSC warns all users to beware, in light of the number of previous warnings I’d say that was a good idea. Titantrade has been warned by CONSOB (Italy), the OSC (Ontario, Canada), the AMF (France), the CFTC REDlist and has been banned completely from Australia by ASIC. Titantrade also claims to have a Samoa IFSC license which is also not true.


The Ontario OSC issued a warning against OptionRally last week, but it doesn’t matter. The OSC warns that OptionRally isn’t licensed to operate in Canada or Ontario, no broker is, although they fail to mention that OptionRally is licensed by CySEC and Belize. In fact, OptionRally is not even allowd to accept customers from Canada, due to CySEC regulation, so if they are we can expect to hear about a fine in the near future. OptionRally is one of the leading CySEC regulated brands operating throughout the EU and prominently partnered with a number of top sports teams in the region.


Australias’s ASIC warned against BinaryUno, not the first this broker has received. ASIC says the broker has been cold-calling Australian citizens, offering trading advice and more. BinaryUno is owned by Smart Choice Zone LP of Scotland but does hold an FCA or CySEC license either. Previously, BinaryUno was warned by the British Columbia regulator, BCSC, the AMF and CONSOB.


In a surprising move the Malta regulator, MFSA, has issued a blanket warning about binary options, the risk associated with and in particular the marketing strategies of these firms. The warning is a surprise because it does not mention names, or make differentiation between regulated and non-regulated brokers. Considering the environment the industry is now operating in it seems like this move is Malta getting on board with the growing movement to control the advertising and marketing of binary options, where the real scams are found.


The Bottom Line

The bottom line is easy to see. The regulators are working hard to make sure the public is aware of who is regulated ( or not regulated) in their jurisdictions, to curb improper/fraudulent marketing/advertising and to make the regulated brokers take responsibility for the same.