CySEC Fines anyoption owner Ouroboros
In ancient legend the ouroboros which is sometimes depicted as a snake, sometimes as a dragon, ate itself. With global regulators and law firms focussing on rogue binary options operators the ouroborous may be depictive of the Tel Aviv binary options industry.
CySEC Fines anyoption €235,000
On the 30th March CySEC announced that their latest prey is Ouroboros, the operator of the binary options operator anyoption.com, which has received a fine totaling €235,000 from the Cypriot regulator.
Anyoption have garnered a reputation as having one of the most aggressive, persistent and downright irritating sales force in the business so it doesn’t come as any surprise that CySEC have now taken action against them.
What is more promising is that it would appear that Cyprus/CySEC is now proactively looking to demand that its wards are now operating in Cyprus as opposed to having a nameplate with a Cypriot firm of accountants. In CySEC’s own words:
“It [Ouroborous] has committed to move all call centers to Cyprus, which will contribute to a more efficient monitoring of the activities of the call centers.”
If these Tel Aviv operations wish to operate under a EC regulatory license then they should be operated 100% from a European country. Right now the senior management of these companies appear to have their cake and eat it with PSPs in Eastern Europe, an EC license in Cyprus but with operational management taking place in Tel Aviv.
Is CySEC dealing with these outfits in the manner required? On the face of it this question has to be answered with a resounding “No!”. When compared to the size of the fines dished out to Banc de Binary in the US €235,000 is chickenfeed. The fact that there is no fund to repatriate fines to clients lends credence to the view that these fines are prely to bolster the Cypriot government’s coffers.
In the same manner that the Times of Israel has highlighted the damage these binary bucketshops are doing to the reputation of Israel, CySEC, with the light regulatory touch is doing a similar disservice to Cyprus by plunging its own snout into the binary trough, at the expense of the client it is purportedly protecting.
The fines meted out were:
- €70,000 for providing ‘…..the investment service of investment advice, which is not stated in its authorization.’
- €10,000 ‘…..since the Company’s executive director did not commit sufficient time to perform his duties and did not adequately supervise the Company’s services/activities.’
- €10,000 since:
- The Company did not maintain adequate and orderly records of its marketing communications;
- The Company did not implement and maintain effective and transparent procedures for the reasonable and prompt handling of complaints or grievances received from clients;
- The Company did not keep an up-dated/complete internal operations manual.
- €20,000 ‘…..since, during the outsourcing of its marketing and sales service, it did not take reasonable measures to avoid any unjustified aggravation of the operational risk and not to impair the CySEC’s ability to supervise the Company’s compliance.’
- €40.000 as Ouroborous ‘failed to act fairly, honestly and professionally in accordance with the best interests of its clients in relation to the terms and conditions for the granting of benefits (trading bonus) and the practices applied in this respect.
- €30.000 ‘…..as the information the Company provided to its clients, amongst others, through its website and the information contained in the advertising material of the Company, were not fair, clear and non-misleading…’
- €15.000 ‘….as the information provided to clients/potential clients on its website at the relevant time, upon entering into the business relationship, were not appropriate so that the clients are reasonably able to understand the nature and risks of the investment service offered and the specific type and the proposed financial instrument…..’
- €40.000 as Ouroborous ‘……..failed to ask clients to provide the necessary information regarding their knowledge and experience, to assess whether the investment service or financial instrument envisaged is appropriate for them.’
CySEC goes on to list seven mitigating circumstances that it has taken into consideration, one of which being the transfer of the call centres to Cyprus.