Colossal sanction against iTrade Global (CY) Ltd: broker fined by CySEC for $1 million(1) iTrade: Company and business overview
(1.1) General presentation of iTrade Global (CY) Ltd
iTrade Global (CY) Ltd is a Forex and CFD investment company, registered and regulated by CySEC in Cyprus. Its registered trading names include TRADEDWELL, INVESTFW and TRADEFW. The company has two online domains for its users to trade: investfw.com and tradedwell.com. It does not appear that the company operates the name TRADEFW.
That said, it seems that both domains operated by the company are in the midst of suspending their business. The trading platform investfw.com says it is no longer accepting new clients. As mentioned on its website, iTrade Global (CY) Ltd “is working to modify its business operations to continue to offer its services to its existing clients and to accommodate only institutional investors.”
The other trading platform tradedwell.com has also made its website inaccessible, with a message explaining that the domain will soon disappear. It should be noted that the decision to cease trading TradedWell predates the general sanction of CySEC regarding the activities of iTrade Global (CY) Ltd.
(1.2) User reviews of platforms operated by iTrade Global (CY) Ltd
Generally speaking, the opinions of individuals who have traded on tradedwell.com or investfw.com are negative. Aggressive canvassing, lack of transparency, and even deliberately misleading information provided to individuals are all negative experiences that make it difficult to reassure consumers.
Here, this particularly detailed review tells us that InvestFW representatives allegedly manipulated their client to profit from his losses. He explains that he was coached in his trading practice before realizing that the positions he was encouraged to take were losing or generally disadvantageous.
As part of our legal practice, we are regularly called upon to analyze the commercial practices and other operating methods of brokers, particularly when they are regulated by the competent financial authorities. Some of the victims we represent have been subjected to a similar pattern of inducing users of a platform to lose in order for the platform to make a profit. In the European Commission’s Delegated Regulation (EU) 2017/565 on investment firms, there is a clear reference to the independent nature of the offer of financial products and investment advice.
(2) A historic fine from the Cypriot regulator
(2.1) An unprecedented sum and a verdict without appeal
On April 13, CySEC announced its decision to penalize iTrade Global (CY) Ltd. by up to 1 million dollars. This sum is unprecedented; moreover, contrary to the usual sanctions of the regulator, the verdict condemns the company. Indeed, financial agreements between CySEC and investment firms are usually based on a principle of ‘possible deviations’, which leaves the benefit of the doubt as to the fault of the broker.
Here, CySEC has decided to impose an “administrative fine” as stated in the official statement. The regulator drew up a list with seven main points on which to attack the broker, with no opportunity for the latter to contest the charges.
Here is a summary of CySEC’s verdict:
– € 240,000 fine because iTrade Global (CY) Ltd did not adapt its user policy to the Law, therefore did not take the necessary measures to supervise its customers or to ensure an archive of its consumers’ communications.
– € 120,000 fine because iTrade Global (CY) Ltd failed to identify and manage instances of conflict of interest with its tied agents.
– € 130,000 fine because iTrade Global (CY) Ltd’s tied agent, for which the company is responsible, did not act in the best interests of its investor clients.
– € 110,000 fine because iTrade Global (CY) Ltd and the tied agent for which it is responsible lacked transparency in their canvassing of clients and the services offered by the platforms it operates.
– € 80,000 fine because iTrade Global (CY) Ltd’s tied agent was not able to provide the canvassed clients with tangible information regarding the company’s business model and the services it offers.
– € 80,000 fine because iTrade Global (CY) Ltd voluntarily selected people with little trading knowledge and failed to inform them of the risky nature of their operations.
– € 240,000 fine because iTrade Global (CY) Ltd failed to supervise the activities of its tied agent despite its supervisory responsibility in this regard.
(2.2) Implications and consequences of such a decision
It is not the habit of the Cypriot regulator to sanction the investment companies it supervises with such firmness. According to the various statistical reports published by CySEC, the total amount of administrative fines assigned in 2022 is equivalent to $2.9 million. It seems clear that the amount of the April 13, 2023 penalty against iTrade Global (CY) Ltd is unusual; it represents approximately one third of all penalties awarded in 2022.
It is known that iTrade Global (CY) Ltd has delegated part of its activities to a third party, the so-called tied agent. However, it is very difficult to find any information about this tied agent. There are reports that it is a third party operating on Spanish territory, but on the CNMV website (Spanish financial authority), no information is available in the ‘agents’ sub-section.
In light of the turmoil that iTrade Global (CY) Ltd is experiencing, and the recent firmness of the European regulator, one wonders if regulated brokers will change their activities to make trading fairer and more transparent for their consumers. If you believe that you are a victim of non-compliant practices by your broker, you can contact us.
Disclaimer:
The Financial Fraud Lawyers network aims to inform private investors (traders) of potential malpractices by Forex and CFD brokers. Our mission is to assist and protect traders when they encounter brokerage practices that go against their interests.
Our articles are intended to warn, share and inform the public about the legal risks of Forex and its players. Trading financial products and CFDs as well as investing on online platforms carry legal risks.
The article was written in good faith, based on public information and client testimonials valid at the time of publication. Our articles concern the protection of the interests of individuals on online investment platforms and are published in accordance with our right to inform the public about our activity. This article is not to be considered legal advice.
