The Financial Conduct Authority (FCA) has issued multiple warnings to investors advising them not to use the services of several clone/unregulated brokerage firms.
The latest regulatory flurry includes forex brokers and asset managers that appear to be soliciting and/or accepting funds from UK residents without having obtained FCA registration.
The regulator has warned against a clone firm called EOCFX. The FCA alleges that the copycat broker has been posing as FXCM to convince local traders that it was the authorized online trading firm that had contacted them.
The clone has no association whatsoever with FXCM and is thus involved in fraudulent activity, the watchdog said. The clone company also claims to be licensed by the FCA, using the regulated firm’s FRN and registered address.
EOCFX was not only identifying itself as a well-known online trading company under false pretenses, but it was operating without authorization as well. That alone is a major violation of British law.
Clone firms are not an unusual occurrence in the industry, as fraudsters have grown increasingly resourceful in recent years. In a cloned scam, the fraudsters copy or “clone” a legitimate website. The copy of the website can be astonishingly exact, or just an approximation with copied logos, but the intent is ultimately to separate victims from their money, credit card number, or login credentials.
The FCA encourages traders or those considering online trading to exercise caution, strongly advising against funding an account or investing with them. Anyone who chooses to sign up with the impostor should bear in mind that they will not receive the financial authorities’ assistance should things go awry.
Separately, the City watchdog has also warned against FMarketX and Online-Trading.Trade, which were flagged for operating and targeting UK citizens without a license. The FCA pointed out that these companies are based out of undisclosed jurisdictions while soliciting its clients using the websites: online-trading.trade, capitalinvest365.com and https://fmarketx.com.
The warning is another step in the FCA’s tireless efforts to crack down on unregulated firms posing as legitimate approved businesses with full force. The regulator has previously issued warnings against similar companies, urging the public to beware of firms working outside the law and without the proper necessary approvals and licenses.