The UK Financial Conduct Authority (FCA) today said it acted to stop Cyprus-based Finteractive Limited, trading as FXVC, from offering high risk CFDs to UK investors.
According to the UK watchdog, FXVC used a variety of inappropriate techniques, including misleading financial promotions which appeared to offer consumers the opportunity to purchase shares in a well-known company and failed to mention that they were actually promoting CFDs.
Many of the FXVC’s customers were unclear about the nature of the investments that they were being persuaded to make and the risks involved in trading in CFDs. The firm used pressure tactics, described by one customer as ‘relentless’, to encourage consumers to invest ever increasing sums of money. Some customers were even encouraged to declare they were professional investors despite not meeting the necessary criteria for such categorisation.
The FCA has stopped FXVC conducting any regulated activities in the UK and required the firm to close all trading positions and return the money to customers.
FXVC operates in the UK under the Temporary Permission Regime (TPR) put in place for firms who used to operate in the UK under a passport and who wish to continue to operate here following the UK’s exit from the European Union. These firms operate under the TPR until their application for full authorisation by the FCA can be considered.
Let’s recall that, in June 2020, the FCA took similar action against four Cypriot CFD brokers: Hoch Capital Ltd (trading as iTrader and tradeATF), Magnum FX (Cyprus) Ltd (trading as ET Finance), Rodeler Ltd (trading as 24option) and F1Markets Ltd (trading as Investous, StrattonMarkets and Europrime). Back then, the FCA noted a number of transgressions made by each of the firms when it came to engaging with UK clients, most notably the use of unauthorised celebrity endorsements on social media as part of their marketing to UK clients, and the pressuring of clients into making trades.