The US Commodity Futures Trading Commission (CFTC) today updated its caution list, the ‘RED List’, in which it warns the public against unauthorized FX and that are illegally conducting financial services targeting the country’s residents.
The CFTC added 20 new names to the list, bringing the total number of backlisted entities to over 146.
Today’s warning is also another action within the US regulators’ crackdown on binary options operatives after a series of reports uncovered massive fraud in the shady industry that had been centered in Israel. In August, a federal judge convicted of three counts of wire fraud and one of conspiracy to commit wire fraud in connection with the same case. Elbaz, 38, is scheduled to be sentenced next week by a federal judge in Maryland.
Elbaz, who proudly called herself a “money-making machine,” trained employees to lie to investors and rig the odds against them, while falsely guaranteeing returns of up to 40 percent.
The RED list
Short for ‘Registration Deficient List’, the RED list follows the example of other regulators abroad, such as the AMF (Autorité des marchés financiers) in France, which allows investors to identify unregistered foreign entities that may be engaged in illegal practices.
The US regulator’s list includes forex and that appear to be soliciting and/or accepting funds from US residents without having obtained CFTC registration, providing more protection and transparency for investors.
According to the CFTC, many of these foreign entities are acting in a capacity requiring them to be registered with the CFTC. Registration allows the agency to provide greater security and oversight of the industry by examining whether firms meet minimum financial standards as well as disclosure, reporting and recordkeeping requirements.
However, the press release emphasized that registration is no guarantee against fraud or mismanagement by an unethical firm, although it does help bring a higher level of security and accountability to the industry.
The following brands have been added to the RED List:
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