Binary Options Round-Up: Warnings and Fines Hit Well Known Brokers
Regulators have been busy lately, issuing a handful of fines and warnings. The Wild West days of Binary Options are coming to an end! Law and Order shall be the new reality… or at least I hope so. For today I’ve prepared a list of warnings and fines issued by regulators against binary brokerages. Read and keep your money safe!
EZTD Settles For 1.7 Million USD
Between 2011 and 2014, EZTD formerly known as EZ Trader was offering binary options to U.S. citizens without being authorized by the U.S. Securities and Exchange Commission (SEC). As a consequence, they’ve charged EZTD with 1.7 Million USD for misleading investors and operating without the proper authorization. It looks like the SEC is not your average regulatory watchdog and they don’t “take it easy” when it comes to protecting the people they are supposed to protect. This huge sum should serve as a warning for other brokers operating in the U.S. without proper paper work.
EZTD has agreed to forfeit $1,515,858 in disgorgement for profits earned while offering binary options to U.S. customers and they’ve also agreed to pay a $200,000 fine. Sources: SmnWeekly, BusinessWire.
Warnings About Unauthorized Brokers Around The Globe
The Australian Securities and Investments Commission (ASIC) recently warned investors against doing business with Bulgaria based binary options broker Urbanix Ltd. that offers trading services under the name Secured Options. This brokerage is not authorized to offer financial services to Australian clients and the regulator also warned that it could be involved in a scam. The broker doesn’t provide any information about their licensing. Source: SmnWeekly.
Brokers PWRTrade and IvoryOption have been the target of warnings issued by the Manitoba Securities Commission (MSC), which is the regulatory authority in the Canadian province of Manitoba. The Commission informs that these brokers are not authorized to offer binary options to Manitoba customers. Furthermore, the Canadian Securities Administrators (CSA) (an organization of Canada’s provincial and territorial securities regulators) mentions that for the time being there’s not a single binary broker authorized to offer services to Canadian customers.
The British Columbia Securities Commission (BCSC) and the US Commodity Futures Trading Commission (CFTC) have issued similar warnings against IvoryOption and Belgium’s Financial Services and Markets Authority (FSMA) warned against PWRTrade not being authorized. Source: SmnWeekly.
The Kanto Bureau of Japan’s Ministry of Finance added binary broker Banco Capital to its warning list. The brokerage is operated by IVA Gold Ltd., a company located at 121 Bishopsgate, London, England according to Kanto’s statement. Banco Capital also lists an address at Sofia Parliament, 5th & 6th Floor, Landmark Building, 14 Tsar Osvoboditel Blvd., Sofia, Bulgaria. The brokerage does not hold the required licence in Japan and is not authorized to offer binary options trading to Japanese citizens. On top of that, the addresses provided may be false. Source: Finance Magnates.
Swiss regulator FINMA recently warned that binary options broker BankingOption is not entered in the commercial register of Switzerland. Further information is not provided by the Swiss regulator but according to SmnWeekly, BankingOption claim to be fully regulated and registered in Switzerland. The minimum deposit for an account with this brokerage is $2,000, so extra caution is advised. Source: SmnWeekly.
The last warning comes from another Canadian watchdog: The Nova Scotia Securities Commission (NSSC) and refers to Magnum Options, a brokerage owned and operated by Hampshire Capital Ventures Ltd. Binary options are considered securities in Canada, thus they fall under the jurisdiction of provincial regulators but the brokerage is not registered or authorized to sell securities in Nova Scotia. Furthermore, Magnum Options is conducting illegal advertising according to the NSSC. A similar warning has been issued by the British Columbia Securities Commission. Source: Finance Magnates. For more information about this brokerage, read our Magnum Options review.
The Bottom Line
Binary options are slowly turning into a safer trading instrument thanks to all these warnings and fines issued by watchdogs around the globe. As you can see, brokers are still operating without the proper regulation and authorization, but at least the authorities are doing a better job at informing investors. Until next time, stay safe and don’t invest unless you trust your broker!