The Italian financial market regulator, Consob, continues its fight against illegal trading platforms, adding four new names to its blacklist. Among them was a clone of the Northern American Derivatives Exchange (Nadex), a US-based platform for retail investors allowing short-term binary options trading.
New Brokers on the Consob List
The newly added platforms are Prime Markets (primemarkets.co.com), Fintech Market (fintechmarket.consulting), Luxem Capital, Inc. (luxemcapital.com), and Nadex CFD Limited (nadexcfd.com).
At the time of writing, the cloned site of Nadex was unresponsive. However, the other three are fully operational, offering access to trading based on contracts for difference (CFDs). Italian customers will not have access to them after the block by Consob, which is possible thanks to regulations introduced in 2019.
"Consob draws investors' attention to the importance of adopting the utmost diligence in order to make informed investment choices, adopting common sense behaviors, essential to safeguard their savings: these include, for websites that offer financial services, checking in advance that the operator with whom they are investing is authorized, and, for offers of financial products, that a prospectus has been published," the regulator commented in the written statement.
After adding four more entities to the list of blocked sites, the total number of blacked-out addresses since July 2019 has risen to 898.
The Italian Regulator's Proactive Approach
Consob is one of the most active regulators in the European financial market, which regularly monitors the Internet, blocking access to suspicious or unregulated entities.
Finance Magnates reported two weeks ago that the regulator blocked four more sites, including an XTB clone named XTB Empire and a Virtu Financial clone named Virtu Finance.
Also, SolidXM, FX Alta, New Finance LLC, and NEWFX Ltd were added to the list earlier in April.
CySEC is another market watchdog that regularly updates its warning lists. A month ago, it warned retail investors against eight more illegal CFD trading platforms. Additionally, CySEC listed the websites as world-trade-center.io, financista.com, swiftpuprime.com, ocdfinances.net, and ocdfinances.org. The other three are: inverbid.net, inverbid.com, and inverbid.co.
Attack of the Clones
In the financial industry, a clone broker is a fraudulent entity that uses the details of a legitimate, regulated broker to deceive investors into thinking they are dealing with the actual regulated broker.
This can include using a similar name, website design, or even copying specific details, such as registration numbers or addresses, from the legitimate broker's website. Clone brokers typically aim to scam investors out of their money by either running off with deposits or giving false trading advice leading to losses.
Investors need to verify the authenticity of a broker before entrusting their funds. This can be done by cross-referencing the broker's details with those listed on the regulator's official website, ensuring contact details match, and looking for any inconsistencies in branding or website design.
