The CFTC Strikes Back
Citrades Shut Down By The CFTC
The CFTC revealed charges against Jason B. Scharf this week. The alleged charges include his operation of multiple fraudulent binary options brokerages and working in collusion with affiliate marketer Michael Shah to scam traders of more than $16 million dollars. The companies include a network of shell and front companies including CIT Investments LLC (a Nevada corporation), Brevspand EEOD (of Bulgaria) and CIT Investments LTD both of Anguila and the Marshall Islands. These fronts operated broker Citrades.com, a well know scam broker. So far little has been done save to freeze monies and seize documents but it seems apparent that the CFTC was able to catch him red handed. While most scam brokers operated outside the reach of regulators Mr. Scharf made the mistake of perpetrating his scams on the home turf of the most vigilant financial regulators on the planet. The website Citrades.com is no long functional, chalk that up as a win for the good guys.
“The CFTC continues to be committed to rooting out and prosecuting binary options fraud in our markets. As alleged, the fraudulent scheme here involved false claims of outsized profits, fake testimonials, and ‘guaranteed returns.’ And the scheme, as alleged, was massive, resulting in the misappropriation of over $16 million from more than 8,000 customers. This action should send a message to would-be fraudsters that the sort of conduct alleged here will not be tolerated. We thank our international law enforcement partners for their assistance in this case”
OptionRally License Revoked
OptionRally is once again in the spotlight. The broker has had its license revoked by CySEC under the condition it would cease all operations. As of now there is no indication of when the EU based arm of the broker will open, the international Belize based arm is still up and running. The CySEC allegations include non-compliance with fund segregation rules as well as being under-capitalized. This news comes in the wake of a previous fine which resulted in a large portion of the workforce getting laid off. Within the report are comments from regulators questioning whether OptionRally was ever in compliance.
ASIC Fighting A Wave Of Fraud
The Australian regulator ASIC is still fighting a wave of fraud sweeping across their country. In the last two weeks the agency has added 8 new names to their list of unregulated, unlicensed and possibly fraudulent brokers. The main complaint of course is soliciting Australian clients without a license although marketing tactics, cloning websites and unauthorized account management are included. The new lists includes a few names we’ve not heard before and one that we have; IvoryOptions, a well known scam broker. Others include BBBMarkets, Plusstocks, Aram Binary Options, Millennium Option, VX Market and London Capital Group. Australia does allow binary trading and there are regulated brokers to choose from, just not very many.
FCA Is Not Silent
The UK’s FCA has not been silent in recent weeks either. The regulator has issued a warning against GSI Markets for operating without a license and as a possible scam. The FCA has done a fine job of sweeping the unregulated brokers from their country, now its time for them to let some good ones operate.