British Insolvency Service Shuts Down Owner of Unregulated Broker Trade12

The regulator found that Global Fin Services had used high pressures sales tactics to defraud customers

Smile fellow Finance Magnates readers, for it’s a great day in the retail trading industry. Why? Because the British government’s Insolvency Service has shut down Global Fin Services Ltd (GFS).

As informed as most of you Finance Magnates readers are, I appreciate that this name will likely be unfamiliar to most of you. Many visitors to this site may, however, be familiar with Trade12 – a retail broker.

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GFS is the company that, for the past few years, has been operating Trade12. If you have had the misfortune of dealing with Trade12’s less than scrupulous sales team and shoddy business operations, the following will make for pleasant reading.

The Insolvency Service has decided to shut the company down. Like many other unregulated brokers, the firm has a virtual office in the UK with its holding company, Exo Capital Markets, registered in the Marshall Islands – a country that appears to be populated exclusively by unregulated brokers.

Trade12 London

Unlike the majority of these brokers, the firm itself is actually registered in the UK. That means you are free to peruse its companies house profile and have a look at some of the fine figures that have held senior positions at the firm.

It also means that the Insolvency Service can shut the company down. Speaking to Finance Magnates, the Insolvency Service said that the firm would no longer be able to list itself as being registered in the UK.

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The regulator decided to close the broker after receiving multiple complaints from customers. An investigation found that, surprise surprise, the broker had been targeting uninformed members of the public, using high-pressure sales tactics and lying about the potential returns on investment.

When customers withdrew their funds, if they were able to withdraw them at all, then they would immediately suffer losses. Trade12 salespeople, showing astonishing gall, would then tell these clients they had to deposit more funds so that they could try to make their money back.

$1.25 million fraud

Over the course of its investigation, the Insolvency Service found no evidence that the broker was even investing the money in the manner it said that it was. The company also failed to provide any of its accounts, leaving the Insolvency Service unable to determine if the claims against it, totaling $1.25 million, were accurate.

Finance Magnates spoke to the Insolvency Service this Thursday. A spokesperson for the regulator confirmed that it would be taking steps to ensure the company is shut down. The spokesperson added that the company might take steps to ban all persons affiliated with the firm from taking ownership in UK-based companies.

Though the Insolvency Service should certainly be commended for its efforts, it’s unclear how effective they will be. The firm’s headquarters is, after all, in the Marshall Islands and unregulated brokers are not renowned for showing any great concern for regulator’s edicts.

Nonetheless, the Insolvency Service’s actions were more forceful than the Financial Conduct Authority’s usual, and less noteworthy, method of issuing warnings against companies. What’s the impact of this going to be? Unfortunately for us, dear reader, we’ll just have to wait and see.

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