Regulator circles binary options broker that pushed its client to the limit
23traders.com that allegedly led to the suicide of a 61-year old Canadian man, attracts the attention of Denmark’s financial regulator.
Last week, FinanceFeeds reported about the horrid consequences of the aggressive practices of binary options broker 23traders.com. According to an article in The Times of Israel, it was this particular broker that led to the suicide of a 61-year old Fred Turbide of Edmonton, Alberta. Mr Turbide suffered losses exceeding CAD 300,000 (USD 226,760), with about two-thirds of this sum lost on the 23Traders.com platform, which operates from Israel.
The binary options broker has now attracted the attention of regulators outside of Canada and Israel. In a token move, Denmark’s Financial Supervisory Authority has voiced its concerns about this particular company. The regulator notes that it has been informed that 23 Traders, operating via www.23traders.com, has been offering to carry out financial services in Denmark. The watchdog explains that 23 Traders does not have authorization from the Danish Financial Supervisory Authority in accordance with the Financial Business Act to provide such services in Denmark.
It is, of course, useful for regulators to issue warnings – as these may serve to prevent customers from making the wrong investment and suffering heavy losses. However, the percentage of clients of binary options firms that consult regulatory websites is unknown and, furthermore, some of the websites of regulators may be hard to navigate even for people who know what they are looking for.
In addition, regulatory announcements, alerts and warnings have minimal legal value when it comes to pursuing a fraudulent broker in court. The activities of fraudulent binary options companies have thus far been immune to “Black Lists”. The “naming and shaming” approach is simply not effective in this respect.
The efforts are now concentrated in the hands of EUROPOL, which last week made clear its perspective on how to deal with binary options fraud. EUROPOL, the European Union’s federal law enforcement agency, has more extensive powers than a financial markets regulator. As noted in FinanceFeeds’ report, EUROPOL may take action against employees of binary options firms too.
The EUROPOL summit on binary options fraud, held two weeks ago, had amid its participants officials and investigators from a number of European countries as well as the FBI, the US Securities and Exchange Commission, the Canadian Securities Administrators (CSA), and France’s financial markets authority AMF.