Top News: Regulators Blacklisting Brokers and Suspending Others

Authorities Blacklisting Brokers is Becoming Popular, but is it Effective?

The trend of blacklisting brokers continues by regulators around the world. Agencies in Quebec, Switzerland, Cyprus, Belgium, UK and other countries are not resting in the hunt for fraudulent brokers that offer financial services to their citizens. Bans, warnings, suspensions, revoked licenses and listing on the public blacklist are the most common methods used by authorities to fight the scam investment firms. Some of these blacklisting’s are giving results but others aren’t leading some to question the lack of global standards.



Unauthorized Doesn’t Mean Illegal?!

Quebec’s financial regulator, AMF, has proven to be a tough one. Their blacklist is expanding rapidly and recently several new names were added, including both forex and binary options brokers. Any firm that offers financial services in Quebec must be registered with the AMF or join their blacklist. AMF has also warned Quebecers to stay alerted and not to invest with any unregistered binary options platform or investment firm. The problem is that while most of the blacklisted brokers are indeed scams and frauds, many are regulated by CySEC or other known regulators adding to the confusion traders face when trying to find out who is regulated and who isn’t.


Although many brokers are being warned by various financial regulators around the world, it doesn’t always mean that the company being warned is being fraudulent. The Swiss FINMA, surprisingly, recently brought to attention that the brokers being blacklisted are not always being unlawful. The problem they take not of is that often times a broker will have an office or a phone number in a country where it is not regulated while being regulated somewhere else. The concern of regulators at this point, understandably, is that financial services could be provided to the residents of those countries where the offices were located, misleading traders as to the status of the broker in certain jurisdictions.



Client Complaints are Giving Results

Client complaints regarding matters such as withdrawals and trade manipulation has forced CySEC to take action. When too many complaints pile up against a broker CySEC begins with sanctions and fines, ultimately resorting to revocation of licenses. When brokers withhold or provide false information or operate outside their purview they are also subject to sanctions and penalties. In addition to sanctions CySEC also demanded that these brokers stop providing any types of financial services until the issues are settled. If these don’t work, often including heavy fines, having their CySEC issued license revoked comes next and is often final.


CySEC Latest Warnings:

Tradarea Suspended

PM Investment Capital Suspended

Trader’s King Warning



Blacklists and Suspensions – Making Small Progress

Blacklists and suspensions are slowly making small progress as authorities get better at finding and blocking fraudulent companies. In some cases revoked licenses resulted in closure of the binary options broker but in other cases has had no effect at all. Basically it means that it is still up to the client to do the due diligence before signing up with a broker. For this reason, all the authorities recommend you always stay updated by viewing their blacklists and warnings, even if some on the list are misplaced. In conclusion, the blacklists and revoked licenses has had minor positive effects but the need for a global authority remains unsatisfied. Until it is the chances of finding unlicensed, unregulated fraudulent brokers remains high.