My global network of spies have been giving me a lot of intel on unregulated entities and potentially fraudulent activity in the financial markets, so I’ve rounded ’em up to help y’all stay safe.
SEC charges against Demitrios Hallas and Kevin Amell
The U.S. Securities and Exchange Commission (SEC) filed a complaint against former broker Demitrios Hallas for recklessly trading unsuitable investment products for five clients and misappropriating more than $170,000 in funds for one customer. Instead of investing these funds on the customer’s behalf, Hallas allegedly deposited the funds into his own personal bank accounts and spent them on personal expenses.
Prior to this, the SEC also charged portfolio manager Kevin Amell for diverting nearly $2 million from a Massachusetts-based fund which he had trading authority over to his personal brokerage account. In the complaint, it was detailed that Amell matched trades between the fund and his personal account at prices that he intentionally and fraudulently skewed to benefit himself.
CFTC complaint on Capitol Equity and “RED List” updates
U.S. financial services watchdog CFTC also filed a civil enforcement action against hedge fund Capitol Equity FX, LLC for commodity futures fraud, which involved commingling customer funds with personal funds of its principals and agents, Robert Leland Johnson IV and Marisa Elena Johnson. The firm has also been charged for off-exchange, leveraged or margined retail forex fraud and failure to register with the CFTC.
As for its Registration Deficient List or “RED List” that identifies unregistered firms that may be engaged in illegal financial services practices, the CFTC added 71 new entities to bring its total to 110. This list aims to help U.S. consumers make informed investment decisions by providing information about foreign entities that are acting in an unregistered capacity.
FCA warnings on unregulated and clone firms
Over in the United Kingdom, the Financial Conduct Authority (FCA) issued several warnings against clone firms posing as regulated entities to solicit funds from customers. The regulator reiterated its call for investors to check the Financial Services Register to avoid falling victim to financial fraud.
Among its recent warnings are against Global Marketing Online Limited/ADS Securities (clone of FDA registered ADS Securities London Limited), Zeb Insurance, and House of Loans (clone of Advantage Leads Limited t/a House of Loans), and Zenith Investor.
Canada’s crackdown on binary options marketing
In Canada, the Canadian Securities Administrators (CSA) continues its investigations into binary options firms and has proposed a ban on the advertising, offering, selling and trading of binary options in the country. A provincial regulator, the Manitoba Securities Commission, has already issued a warning against unregistered binary options broker TorOption.
Authorities are wary of aggressive sales tactics involving some Cyprus-regulated firms and many unregulated binary brokers that could expose Canadian clients to financial scams. According to an official statement from the regulator, depositing funds with offshore entities can make it difficult or impossible for clients to fully recover losses as most transactions take place for the purpose of stealing money or personal information.
As discussed in the School of Pipsology, staying educated and doing your homework are among the first steps in protecting yourself from trading scams. Do your research, check broker reviews, double-check regulator watchlists, and exercise extreme caution before forking over your hard-earned funds!