Black Lists Fail To Stop Shady Marketing And Scam Brokers

Warnings, blacklisting, fines and more regulations continue to poor in. In the last week a minimum of 4 international regulators have announced new regulations, new scams or both. In most cases the regulators are beginning to turn focus to the marketing, forcing the brokers to take responsibility for the actions of their network and, hopefully, the shady scam artist marketers out of business.

Spain’s CNMV has announced a raft of new rules and regulations for forex, CFD and binary options brokers. The new regulations are intended to make the brokers take greater care protecting their clients and are focused on costs, risk disclosure, leverage and advertising. Advertising has long been a problem for the binary options industry as it relies heavily on affiliate marketing and there is little to no control over what a 3rd party marketer can do. Brokers have 1 month to comply with the new rules which also require traders to submit a voice or written document stating that they understand the risks involved with trading.

The CFTC is also cracking down on marketing fraud in relation to binary options. The US regulatory agency just fined Neil Pecker and Vision Financial Partners Ltd $6.5 million for perpetrating just such a scam. The allegation is that Mr. Pecker, using Vision Financial, posed as a licensed commodities and derivatives investment professional in order to defraud clients of more than $3 million. The money was invested into offshore and unregulated binary options accounts which prevented the withdrawal of deposited funds. To make matters worse Mr. Pecker also skimmed a cool million directly off the top before disappearing into the wind. Two other firms are named along with Vision Financial and are expected to be fined as well.

Cyprus just suspended the licenses of several forex and binary options brokers including DragonOption and TopOption, which was recently sold to new owners. The allegations claim several violations that may endanger clients funds or disrupt the functioning of financial markets. CySEC has given the brokers 10 days to comply at which time, if no changes have been made, the brokers will have to cease operations. Until then they are not allowed to accept new clients or allow current clients to trade and all monies are to be returned pending recertifications.

The French AMF added 10 new names to its list of blacklisted brokers. Their list is growing exponentially as the country is plagued by scam brokers who will change their names and URL’s as soon as they get listed. Recent actions to ban all forms of electronic advertising of binary options has failed to produce the desired results. The scammers simply hide behind the Internet knowing that would-be get-rich-quick suckers will come looking for them anyway.

Belgian officials at the FSMA are cracking down on unregulated brokers and scam artists alike. The agency added nearly 20 new names to its list including unregulated brokers we’ve heard of as well as clone brokers and what they refer to as boiler rooms. On the list of unregulated brokers are know scams like BMB Options but also trusted brokers like FMTrader which is not a surprise, many regulators target brokers who are regulated in foreign jurisdictions. What is surprising is the focus on “boiler rooms” which turn out to be the call centers and 3rd party customer service centers that use aggressive marketing techniques and fraudulent information to strong-arm deposits from widows and retirees.