The City watchdog has intensified its crackdown on high-risk financial products being used to exploit retail investors, it announced today.
The Financial Conduct Authority has stopped a Cypriot-based firm, BDSwiss Group, from offering high-risk contracts for differences to UK investors.
Sarah Pritchard, executive director, markets at the FCA, said: “Many investors were attracted to the firm via social media accounts.”
“Consumers should be very wary of those on social media making promises which look too good to be true and be careful where they invest their money.”
The FCA launched the regulatory action after it learnt that BDSwiss Group avoided compliance with the watchdog’s rules by exploiting “the fact that one of its firms was regulated in the UK to convey legitimacy on the group as a whole,” the regulator said.
The FCA said “99 per cent of UK consumers taken on by the group traded through the group’s overseas entities.”
Pritchard added: “This group was selling high risk investments to UK investors in breach of our perimeter and the rules for CFDs we have put in place to protect retail investors.”