24option.com parent Rodeler fined €280,000 by CySEC
Cyprus financial regulator CySEC has announced that it has reached a settlement with Rodeler Ltd, which operated the 24option.com and 24fx.com retail brokerage brand websites as licensed entities. The settlement will see Rodeler pay a fine of €280,000 to the Cyprus Treasury, in regards to violations of its CySEC CIF license.
The fine comes after Rodeler had voluntarily renounced its CySEC license last month.
And that “voluntary” move followed trouble that Rodeler, alongside a number of other CySEC-licensed brokers, got into with UK regulator The FCA at the beginning of June. As a Cyprus licensed financial company Rodeler/24option was able to “passport” its license into the UK and all other EU countries, and operate offices in those locations as well as take retail clients from those jurisdictions. However The FCA banned 24option and several other CIF license holding brokers, in a first-of-its-kind move against passporting brokers.
The FCA cited issues such as unauthorised celebrity endorsements on social media to entice consumers into scams involving CFDs. In addition, the regulator noted that the firms had failed to pay money owed to investors, charged customers undisclosed fees, and failed to tell them about the risks of trading CFDs.
Rodeler Ltd had operated 24option, as its name implies, as a Binary Options brokerage, but later transitioned to become a “standard” FX and CFDs broker. It appears as if 24option is continuing to operate website 24option.com as an offshore Belize incorporated entity called Richfield Capital Limited. The company, at the time it renounced its CySEC license, had displayed on its website that it is an official partner of Italian football club Juventus, however they no longer appeared on Juventus’ list of sponsors and partners on the Juventus website. It appears as if 24option has since taken down the Juventus sponsorship reference from its site.
The note issued by CySEC today regarding the settlement with 24option reads as follows:
5th August 2020
CYSEC Board Decision
Announcement date: 05.08.2020; Board decision date: 06.07.2020
Regarding: Rodeler Ltd
Legislation: Τhe Investment Services and Activities and Regulated Markets Law
Subject: Settlement €280.000
The Cyprus Securities and Exchange Commission («CySEC») would like to note the following:
CySEC, under article 37(4) of the Cyprus Securities and Exchange Commission Law of 2009, may reach a settlement agreement regarding any violation or possible violation, act or omission for which there is reasonable ground to believe that is in breach of the provisions of legislation under the regulatory remit of CySEC.
CySEC reached a settlement agreement with the CIF Rodeler Ltd («the Company») – Under examination for voluntary renunciation of the authorisation, for possible violations of the Investment Services and Activities and Regulated Markets Law of 2017 – L.87(I)/2017 («the Law»). More specifically, the investigation for which the settlement was reached, involved assessing, for the period January 2018 until December 2019, the Company’s compliance with:
1. Article 5(1) of the Law, regarding the requirement for CIF authorisation.
2. Articles 25(1) and 25(3) of the Law, regarding general principles and information to clients.
3. Article 22(1) of the Law as to the authorisation condition laid down in article 17(6) of the Law, regarding the organisational requirements with which a CIF is required to comply.
The settlement reached with the Company, regarding the possible violations of its regulatory obligations, amounts to €280.000. The Company has paid the amount of €280.000.
All amounts payable relating to settlement agreements are considered revenue (income) of the Treasury of the Republic and do not constitute income of the CySEC.