AMF reports staggering losses from online trading, calls for ban on advertising, scrutiny of footbal

mlawson71

Corporal
Messages
188
France’s financial watchdog, the AMF, has released its annual report for 2015. It reported that in six year the losses from online trading on “fraudulent sites” reached the staggering 4 billion euro. They were incurred mostly from high-risk investments, such as online trading in forex and binary options in particular.

In 2015 the AMF received 1617 complaints against binary options and forex brokers, slightly more than the 1293 in 2014 and significantly more than the 64 in 2011. Earlier this year the AMF ombudsman Marielle Cohen-Branche also published a report highlighting the rising number of complaints against forex and binary options brokers.

In 2015 the AMF responded to 14421 requests for information. About 75% of them were from individuals and 82% of them were regarding forex and binary options brokers.

Alongside the report, the AMF released a letter its head, Gerard Rameix, sent to French president Francois Hollande. In addition to the general description of the situation on the French and European financial markets and the priorities of the AMF for 2016, Rameix voices his concerns regarding the online high-risk trading, to which the general public is easily exposed. In his missive Rameix notes that in spite the joint efforts of the AMF, the banking and financial services overseeing body ACPR, the competition watchdog DGCCRF and the Public Prosecution of Paris, “4 billion euros of savings have evaporated in 6 years on fraudulent websites”. Therefore, the AMF head calls for the adoption of the new bill, called Sapin 2, which would improve transparency, combat corruption, facilitate the modernization of the French economy. Among other measures, the new bill also bans the online advertising of investment products with high risk of losses, including trading in forex. “I hope this will limit the exposure of individuals to these dangers,” Rameix wrote in his letter. According to AMF data, last year forex and binary options trading accounted for 35% of all online investment advertising in France.

It seems, however, that Rameix will not limit AMF’s efforts to curb advertising of binary options trading only to the internet. Also on Tuesday, he told French journalists he was concerned that the binary options brokers are now advertising themselves through the League 1 football teams. He said the AMF has “made contact” with these football clubs “to try to explain to them the risks hanging over their public”, according to the AFP news wire. Several of the teams are Paris Saint Germain, which has a sponsorship deal with OptionWeb, Olympique Lyonnais, sponsored by 24option and OGC Nice, which has a deal with Interactive Option.

Overall, the AMF took 22 decisions for 65 fines against 28 companies and 37 individuals. The fines totaled a little over 21.3 million, up from 32.86 million in 2014, which was a record year.

In its report, the AMF notes that for the first time it has “attacked” the “high frequency trading” with exemplary punishment of 5 million euro against the US electronic trading firm Virtu Financial and fined a similar amount the European stock exchange Euronext.

Source: smnweekly.com/2016/05/17/amf-reports-staggering-losses-from-online-trading-calls-for-ban-on-advertising-scrutiny-of-football-sponsorships/
 

Midas

Private, 1st Class
Messages
37
While we want to get rich trading some bucket shops are getting rich off of our kind.
 

Pharaoh

Colonel
Messages
20,070
Isn't it nice to know how much money stolen from traders is being spent to sponsor sports teams?
 

mlawson71

Corporal
Messages
188
Isn't it nice to know how much money stolen from traders is being spent to sponsor sports teams?

I have a hard time wrapping my mind around the idea that such a sum could be lost by private citizens. Not that I don't believe it, but why no one took any measures earlier?
 

Pharaoh

Colonel
Messages
20,070
I have a hard time wrapping my mind around the idea that such a sum could be lost by private citizens. Not that I don't believe it, but why no one took any measures earlier?

Probably because of the way many brokers are set up through multiple shell corporations, figuring out exactly which agencies are responsible to step in was a bureaucratic nightmare.
 

mlawson71

Corporal
Messages
188
Probably because of the way many brokers are set up through multiple shell corporations, figuring out exactly which agencies are responsible to step in was a bureaucratic nightmare.

A legitimate broker usually has information on their website about the organization that has licensed them and is overseeing them. It's a matter of a little research to find out whether this information is true or not. Unfortunately many people don't actually know they should do this or even how to do it. I remember when I was a newbie I was so trusting too, it didn't even occur to me to check the authorities about the information the brokers I was a client to were providing me with. Sometimes I wonder how I managed not to get scammed at the time. It was pure luck, I think, but one cannot rely on luck.
 
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