The trend of regulatory authorities warning against binary options brokers continues as the United Kingdom’s financial regulator – the Financial Conduct Authority (FCA) – warned traders to steer clear of AIG Options and CMC Options. This warning, coming in the last week of June, was issued due to the fact that both brokerage firms are operating in the country without the FCA’s authorization. Because of the way the warning was issued, speculation has risen that the two firms may be run by the same parent company.
The Real Problem
The FCA, in their warning to UK traders, stated that both brokerage firms have been actively offering financial and investment advice actively, as well as other services, without submitting federally mandated registration. Failure to submit appropriate registration with the FCA puts both AIG Options and CMC Options in violation of British investment laws.
The other significant problem with both brokerage firms is the fact that they’ve chosen names similar to other companies operating legitimately within the country. This, according to the FCA, was done intentionally to confuse clients, tricking them into a false sense of security and thus enabling the firms to draw in further clientele and helping them to generate a bigger pay off.
Because AIG Options and CMC Options are in violation of British law and continue to operate without the authorization of the FCA, the federal regulator is warning traders, or potential clients of any kind, to avoid both firms.
Because AIG Options and CMC Options are in violation of British law and continue to operate without the authorization of the FCA, the federal regulator is warning traders, or potential clients of any kind, to avoid both firms. Secondly, the FCA is encouraging any current clients of either firm to pull any financial investments they’ve made with the firms and to avoid making any other investments with them.
The FCA continues with a warning aimed directly at any clients that choose to continue trading with AIG Options and CMC Options. For those customers who decide to stay on with the firms, neither the Financial Services Compensation Scheme nor the Financial Ombudsman Service will provide any help or return any lost investments if the firms go under or if they scam clients out of their money.
A growing trend in negativity and mistrust among binary options trading brokers is further fueled by this latest occurrence in the UK. Because AIG Options and CMC Options both continue to operate and bring in new clients, knowingly trading and offering financial advice without the approval and necessary authorization of the FCA, a full investigation into the firms is imminent. The outcome for clients, in the wake of the FCA’s warning, remains to be seen.