Cyprus financial regulator The Cyprus Securities and Exchange Commission (CySEC) has announced that it has been informed by a number of market participants that persons fraudulently presenting themselves as CySEC officers or representatives are soliciting investors for fees, in exchange for settlement of bogus compensation claims related to firms under CySEC supervision.

For that reason, CySEC said that it would like to remind the public that it never sends unsolicited correspondence to investors or members of the public, nor does it ever request any personal data, financial or otherwise.

CySEC noted that it has no authority or jurisdiction to collect fees for any purpose from individual investors, nor does it have authority to appoint anyone to do so on its behalf. The regulator does not authorize, verify, monitor, or is in any way involved in class actions, compensation schemes, payments between natural or legal entities or any public or private agencies.

Such cases occur often and may be part of a sophisticated online campaign that is defrauding investors. Typically, such scams may have the following characteristics:

  • Individuals claim to be CySEC officers, appointed representatives of CySEC (e.g. legal advisors), other Cypriot supervisory authorities (e.g. the Central Bank of Cyprus or the Financial Ombudsman) and/or other real or fake bodies, such as «the Insurance Indemnity Guard.
  • These scammers may contact investors that are clients of regulated entities under CySEC’s supervision, often via email which appear genuine – they carry the name, address, official stamp and logo of CySEC and fraudulently copy CySEC officials’ signature.
  • The fraudsters then make false promises to assist investors with compensation for potential damages in connection with dealings they have had with sanctioned firms (typically online trading firms offering speculative investment products).
  • Through this engagement, the fraudsters illegally obtain personal information including telephone records.
  • In some cases, investors are then called via telephone in relation to an email correspondence.

CySEC has issued multiple public warnings when similar cases occur, which are published on its website. The regulator said that it urges the public to remain vigilant regarding any unsolicited communication from CySEC, to refrain from giving money to anyone who claims any or all of the above, or similar. Investors are strongly advised to contact CySEC to confirm the authenticity of the communication.