The Financial Conduct Authority (FCA) has issued multiple warnings to investors advising them not to use the services of several clone/unregulated brokerage firms.
The latest regulatory flurry includes forex and binary options brokers that appear to be soliciting and/or accepting funds from UK residents without having obtained FCA registration.
According to the City watchdog, many of these entities are acting in a capacity requiring them to be registered with the FCA. Registration allows the agency to provide greater security and oversight of the industry by examining whether firms meet minimum financial standards as well as disclosure, reporting, and recordkeeping requirements.
The regulator has warned against clone firm 4 You Limited, which is impersonating FCA-authorized firm Independent Financial Services 4 You Ltd. Individuals in the UK have been also targeted by another clone operator, Viking Investments Global, drawing this latest warning. In this case, the named company has been using the details of Viking Global Investors Europe LLP. The FCA urges caution when clients receive calls from such companies.
KVB PRIME Strikes UK with Influential Finance Summit SponsorshipGo to article >>
Clone firms are not an unusual occurrence in the industry, as fraudsters have grown increasingly resourceful in recent years. A commonly adopted tactic is for scammers to advertise an illegal operation as a reputable brand or entity.
A lesser-known FX broker called Capital City Holdings was also blacklisted by the UK’s financial regulator after the company in question claimed that it operated with an FCA license.
The Financial Conduct Authority has clarified that the company in question does not, in fact, have any valid license of any kind, stating that Capital City Holdings is not authorized to provide investment services or activities in the country.
Echoing previous warnings, the FCA ignores that unauthorized brokers continue to promote unregulated investments, taking money from the general public, and the regulator is powerless to do anything.