Binary options fraud among top concerns of Swedish financial regulator FI

Maria Nikolova

Binary options and stock-related fraud top the list of warnings issued by Sweden’s financial markets regulator in 2017.

Binary options were among the key reasons for issuing warnings in Sweden last year. This becomes clear from the Annual Report for 2017  published by the Swedish financial markets regulator Finansinspektionen (FI).

In 2017, FI warned about 1,129 non-compliant companies that operate in the Swedish market without the necessary permission. In 2017, the warnings concerned mainly equity-related fraud, but also fraud related to binary options. FI made a decision about warning in 18 cases. The bulk of the warnings were received from foreign agencies.

The numbers are in line with recent data provided by other regulators in Europe. For instance, Belgium’s Financial Services and Markets Authority (FSMA) reported in February that it received 1,710 notifications from consumers about various financial matters in 2017, up 13% compared to 2016. Nearly half of the enquiries were questions or complaints relating to fraud and unlawful offers of financial products and services. There were 792 such messages in 2017, up by 45% compared to the previous year.

The messages reporting fraud or unlawful offers mainly concerned binary options, boiler rooms, pyramid schemes and ‘phishing’. New topics in 2017 included credit fraud, virtual currencies and fraud with investments in diamonds. The FSMA published 116 warnings last year, up 70% from 2016. The FSMA issued 46 warnings about boiler rooms, and 42 about fraud related to binary options.

Whereas the Swedish regulator does not outline any particular plans with regard to binary options, the European Securities and Markets Authority (ESMA) is currently considering to ban these instruments. ESMA mulls a prohibition on the marketing, distribution or sale of binary options to retail clients. The regulator considers to adopt this measure as the significant investor protection concerns relating to this product are due to inherent features of the product that are unlikely to be sufficiently addressed through certain restrictions on the product (such as minimum duration contract periods).

Even Norway, which is not a part of the EU but is a part of the EEA, is planning strict measures with regard to binary options. The Financial Supervisory Authority of Norway (Finanstilsynet) proposes that marketing, selling and distribution of binary options to non-professional customers in Norway or from Norway is prohibited. The watchdog emphasizes that it has, on several occasions, investigated foreign providers of binary options that have targeted Norwegian investors without a necessary license. The regulator notes that these entities use aggressive marketing methods and do not provide the necessary risk warnings.

Read this next

Digital Assets

LMAX Digital onboards Bryan Christian and Cassandra Cox to lead sales

Institutional cryptocurrency exchange LMAX Digital continues to undergo a series of changes in its top ranks as it continues to build its presence globally. Two industry veterans, Bryan Christian and Cassandra Cox, have joined the group as its newest sales directors in Europe and USA.

Digital Assets

Cake DeFi introduces Ethereum Staking with 5% returns

Cake DeFi, a Singapore-based DeFi platform, is launching its Ethereum (ETH) staking service for retail and institutional customers.

Retail FX

FX trading rebounds 405pct at Saxo Bank in September

In a volatile market driven by Russia-Ukraine headlines, FX trading volumes through Saxo Bank have rebounded strongly in September to the highest level in three months.

Retail FX

CMC Markets’ stock climbs as H1 revenue to climb +20%

CMC Markets PLC (LSE:CMCX) shares spiked 5.6 percent to 235p in Thursday’s trading after the firm’s trading update for the first half of its fiscal year 2023 revealed results at the high end of company projections.

Retail FX

Interactive Brokers doubles client accounts to 2 million in 24 months

Electronic brokerage firm Interactive Brokers LLC (NASDAQ:IBKR) said its trading volumes took a slight step back in September, an indication that investor confidence is still fairly mixed over the past few months.

Digital Assets

DeFiChain tokenizes Walmart, Unilever, US Oil and Gas Funds

Bitcoin-based DeFi platform DeFiChain is opening up the opportunity for its users to trade crypto versions of Walmart, Unilever, US Oil Fund, and US Gas Fund.

Industry News

The B2Broker B2Core REST API Is Now Live

B2Broker has announced the release of its new REST API, which lets customers use B2Broker’s solutions and services for business purposes.

Executive Moves

CME Group taps Paul Woolman to lead Equity Index, Giovanni Vicioso to lead Crypto

“Our equity and cryptocurrency businesses have experienced tremendous growth in recent years, underpinned by strong customer adoption and continued innovation.”

Technology

Sumsub launches document-free KYC for users in India, Brazil, Nigeria and Indonesia

Sumsub has launched one click-KYC for users in India, Brazil, Nigeria and Indonesia in a move that allows businesses to instantly onboard over 2 billion users without requesting their ID documents.

<