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The BDSwiss Group used the fact that one of its firms was regulated in the UK to convey legitimacy on the group as a whole. However, 99% of UK consumers taken on by the group traded through the group’s overseas entities. These overseas firms had no authorisation to provide regulated services in the UK, and consumers who traded with the overseas firms lost the protections given to consumers who trade with an authorised firm. In particular, the overseas firms did not comply with the FCA’s restrictions on the marketing and sale of CFDs to retail consumers.
Sarah Pritchard, Executive Director, Markets at the FCA said:
‘This group was selling high risk investments to UK investors in breach of our perimeter and the rules for CFDs we have put in place to protect retail investors.
‘Many investors were attracted to the firm via social media accounts. Consumers should be very wary of those on social media making promises which look too good to be true and be careful where they invest their money. We have acted where we can but once again repeat our call for restrictions on this type of advertising to be included in the Online Safety Bill.’
The FCA identified serious concerns with the sales and marketing practices of the BDSwiss Group, including the use of misleading financial promotions which made unrealistic claims about the likely returns, failed to state clearly the nature of the financial instruments being marketed and failed to outline the risks involved in trading CFDs. The Group and its affiliates frequently contacted consumers directly, using social media platforms to make contact and market their products.
In many cases, social media showed the affiliates leading an opulent lifestyle which they claimed was being funded through trading and could be emulated, which was not the case. In fact, the affiliates were paid substantial commission for referring customers to the Group.
As a result of the activities of the BDSwiss Group and these affiliates, numerous UK consumers have lost significant sums of money.
The FCA has required BDSwiss Holding Plc to stop conducting any regulated or marketing activities in the UK and has directed it to take all reasonable steps to stop other members of the BDSwiss Group doing the same. It has also ordered the firm to close all trading positions and return the money to customers.
The FCA has invested almost £2m in its ScamSmart campaign this year, targeting consumers at risk of investment scams, with adverts across search engines and social media sites. You can find out more about the ScamSmart campaign: and more specifically about forex scams. However, legislation is needed to tackle these types of scammers and the FCA has called on both the Government and social media platforms to protect consumers in this space and take more responsibility for this type of content. The FCA has already issued 933 warnings this year about scams.
Notes to editors
- First Supervisory Notice: BDSwiss Holding Plc (PDF)
- BDSwiss Holding Plc was operating in the UK under the Temporary Permission Regime (TPR), put in place for firms who used to operate in the UK under the European Economic Area passporting regime and who wished to continue to operate here following the UK’s exit from the European Union. Firms operate under the TPR until their applications for full authorisation by the FCA can be considered.
- FCA confirms permanent restrictions on the sale of CFDs and CFD-like options to retail consumers