Regulators Issue Warnings – Law Firms Prepare A Class Action Suit
Multiple new warnings have been issued as regulators around the world continue to expand blacklists. The firms involved have drawn attention towards themselves for un-licensed operations in almost all cases. In addition, an autotrader has also been blacklisted, which means authorities have started to shine the spotlight on the marketing aspect of the industry. The most interesting news however, is that two law firms are preparing to start a class action law suit against two known fraudulent binary options brokers.
Undercover Agent Gathers Evidence
The warnings come from different countries but no one we’ve not heard from before. In Canada, MSC warns Central Option and BCSC warns Opteck and Central Option. In both cases, Canadian citizens were being solicited to invest with these brokers that are in fact not authorized to offer services in Canada. According to Financemagnates.com, an investigator with the MSC went “undercover” as a client with Central Option, during the conversation with the broker’s account manager, the agent managed to gather evidence against Central Option. In the case of Opteck, it does not come as a surprise to us as we have been tracking their operations for years, and mentioned them on our April scam watch!
Brokers Get Regulator Warnings
The following Regulators: ASIC, Consob, CNMV, MoF and FCA all issued warnings against brokers that lacked authorization to provide services in their respective countries. In Australia, uBinary was warned by ASIC after they exposed the company for making cold calls in the country without authorization. Italy’s Consob warned Titan Trade which is also on the US CFTC’s Red List. Spain’s CNMV warned EmpireOption and Japan’s MoF warned TR Binary . UK’s FCA fears that RBS Bourse, an unregistered firm and clone of respected financial giant Royal Bank of Scotland, is soliciting clients in the UK and in France. The FCA further mentions that RBS Bourse is not affiliated with RBS Asset Management – a firm that provides management consulting services. FinanceMagnates also concluded that RBS Bourse alos lied about being regulated. Apparently, the firm uses the FCA’s own logo, together with a fake license number, in order to pull the wool over the eyes of prospective traders.
AMF Challenges Advertisement Campaign
We almost always hear regulators warn brokers. This time, the French AMF has warned Preditrend, a a binary options signal and autotrading service. This software seems to be yet another get-rich-quick scam and is linked to the binary options broker EZ Trader. It is unclear if the software is directly related to the broker but nonetheless it is being used to lure traders to make deposits with said broker.
Breakthrough – €4.3 Million Class Action Law Suit
For the first time, regulators are not the only ones chasing fraudulent brokers! Two law firms, Giambrone Law and Healys LLP are in the process of suing LBBinary and NRG Binary for more than 4 million Euros. LBinary is a recurring guest on our scam watch so it might not come as a big surprise for our readers. We have also warned you about NRGBinary , back in late 2013, in the Communitraders forums. This class suit includes approximately 70 investors with the majority coming from Saudi Arabia and Kuwait. The case will go on trial in the UK because the payments were handled by an FCA regulated company. Once the brokers are found guilty, their assets will be frozen by their banks. According to Giambrone, the goal is to set a new example for whether and how much the banks involved share responsibility when it comes to binary options and Forex fraud. At the moment of writing, NRGBinary’s website is down and the domain is available for sale whilst LBinary is still up and running. Regardless the outcome, it is clear a precedent is being set so we can expect to see more lawsuits in the not too distant future.
Binary Options – There’s Hope
Blacklisting brokers has for a long time been the only approach available to regulators but this is changing fast. Now, fines and lawsuits are coming to the fore. If these cases turn out to be successful, it means that the once helpless clients can now seek justice through the legal system. Even if the first cases don’t bear fruit there is new hope that regulators and lawsuits can one day clear the industry from scams. Only time will tell.