Many online trading and broker scams claim that they have a license and want to pretend to the future victims that they are not serious. On the website and in the penetratingly aggressive calls of the Boiler Room agents the alleged licensing is emphasized again and again. The advice to investors, consumers and traders – do not trust companies with offshore licenses. Even with some EU licenses issued by weak, negligent, or relaxed supervisors, you have to be very careful.
Licenses issued by the Financial Services Commission (FSC) of the British Virgin Islands or the International Financial Services Commission (IFSC) on the Caribbean island of Belize are worth nothing in the EU, the U.S., or Canada. Financial institutions with FSC or IFSC licenses are not automatically entitled to offer financial services in other regulatory regimes. On the contrary, they are not. Common sense should tell you that. How should a financial market regulator of countries with populations of just over 30,000 or 400,000 people respectively monitor the activities of an IFSC-licensed company in North America or Europe? The correct answer is “not at all”.
You should not trust brokers that are only “regulated” or “supervised” by private regulators such as the Financial Services Commission of FINACOM PLC LTD. We have already seen this frequently. These private regulators or Financial Commissions are specialized in complaints or dispute resolution but have no legal powers to monitor. Those private dispute arbitrators may or may not do a good job but they are more often than not used by scammers to demonstrate seriosity.
Potential clients of a broker should always be extremely careful in the first place. If the broker cannot show a license from the respective customer’s country (or an EU license with passporting), then one should not register under any circumstances. Do not even consider it! Don’t fall for their charming or aggressive boiler room agents.
Already with the registration client-victims may provide personal data, which could be abused. Do not do that!