Exclusive: Dozens of Broker Offices Raided by Romanian Police, 130 Arrested

Dozens of offices of unregulated foreign exchange and binary options companies have been visited by Romanian Police.

A big number of brokerages that have been targeting Romanian residents without the appropriate EU financial services registration for years have been using call centers located in the country to also target foreigners. Authorities in Romania have responded heavily in recent days as numerous sources report to Finance Magnates that a number of offices have been raided by local police.

Policemen have stormed into offices of all of the unregulated brokerages that have operations in the country with some regulated brokers also receiving visits albeit in a more casual manner. The raids against the unregulated brokerages resulted in numerous arrests by armed policemen with the current tally amounting to 130 arrested individuals, about 40 of whom remain in custody.

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The targets of the raids are mostly unregulated brokerages that hold their licenses of registration offshore, in countries such as Mauritius and Belize. A number of investors on the Romanian market have been complaining to authorities about the ways in which they have been solicited to deposit their funds, only to not be able to recover any amounts thereafter.

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Unregulated binary options and forex brokerages have been using high pressure sales tactics to solicit investors to deposit fairly large sums of money. Romania’s population of about 20 million makes the country one of the biggest markets in Eastern Europe.

Romania’s population of about 20 million makes the country one of the biggest markets in Eastern Europe

The typical practice that unregulated brokers use is for their sales representatives at the call centers to call their clients and start promising them excessive returns. Moreover, once converted, customers of the brokers have been given financial advise, usually leading to the account being drained empty.

In recent months, French financial regulatory agency, the Autorité des Marchés Financiers (AMF) published its annual report for 2015, outlining that since 2009 fraudulent forex and binary options brokerages have solicited close to €4 billion from French residents.

French authorities have been actively pressuring their European counterparts to crack down on unregulated brokerages. The AMF has also been exerting its influence on the European Securities Markets Authority (ESMA) to pressure the Cypriot regulator into more vigilantly supervising its regulated entities.

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