FCA bans Cypriot firms that used fake celebrity endorsements
The Financial Conduct Authority has barred four Cypriot firms from offering high risk financial bets after they used unauthorised celebrity endorsements to promote scam investments.
The FCA has told the firms to stop all regulated activities after investors lost hundreds of thousands of pounds and several customers lost more than £100,000 each to the scams involving contracts for difference (CFDs).
The firms are Hoch Capital (trading as iTrader and tradeATF), Magnum FX (Cyprus) Ltd (trading as ET Finance), Rodeler Ltd (trading as 24option) and F1Markets Ltd (trading as Investous, StrattonMarkets and Europrime).
The FCA said the firms claimed to be endorsed by celebrities but were not authorised to do so. It did not name the celebrities. None of the rogue outfits has a physical presence in the UK. The bans are the first time the FCA has removed so-called passporting rights from a non-UK firm.
The firms pressured people into making increasingly large investments in CFDs and some were encouraged to borrow to make payments. The operators also failed to pay money owed, charged undisclosed fees and failed to tell customers about the risks of CFDs, which allow traders to bet on financial assets without owning them.
Mark Steward, the FCA's executive director of enforcement, said: 'The FCA has removed passporting rights for these firms which effectively stops them from continuing to provide these types of products in the UK."
Steward welcomed the action of Cyprus's regulator, which has told Rodeler and Hoch to cease regulated activity and partly suspended the licences of Magnum and FX.