BAFIN AND GERMAN POLICE WARN AGAINST ONLINE TRADING FRAUD

BaFin and BKA stand up agains online trading fraudsters

Reads as if it’s a national effort to fight online trading fraud. Finally! Even the German authorities are now likely to find the rip-off of small investors too much. On December 4, 2018, the BaFin, the BKA and the state criminal investigation offices of Bavaria, Baden-Württemberg, Berlin, Saxony-Anhalt, Saarland, and North Rhine-Westphalia issued a joint warning against online providers of binary options on commodities, stocks, currencies (FOREX) and cryptocurrencies.


The Fight Against Online Trading Scams

The innumerable damage reports and criminal complaints of cheated small investors with German enforcement agencies and national criminal offices of Germany, might have led now finally to a reaction of the authorities. FinTelegram has been pointing out scams in online trading such as SafeMarkets or Option888 for months. From FinTelegram’s point of view, the German authorities have been far too indulgent and patient with these scams and the people behind them.

In the press release of the German BaFin, the fraudulent procedure of the online providers is described in detail. The promise of high profits, the ease of use of the systems, the seemingly personal advice from supposingly qualified customer support people, the professional delaying of repayments and the subsequent termination of the business relationship (or the inaccessibility of the online provider) – all these, we have already described in detail in numerous articles. As described in this article, most of the providers of these systems can be found in Israel or, in the meantime, also in Eastern Europe.

Time to Arrest the Perpetrators

FinTelegram published extensive reports on one of the biggest online trading scammers – Gal BARAK, the Wolf of Sofia. Gal BARAK and his partner Marina ANDREEVA are among the biggest fraudsters in online trading. With their various platforms and boiler rooms, they have ripped off investors in Germany, Austria and the European Union. They did so big style.

The headquarters of these scammers are currently located in Sofia, Bulgaria, and thus in the EU, but enforcement actions of international authorities are still difficult. From what we know Bulgarian authorities are rather negligent in fighting those scammers. Most recently, online trading fraudsters from Israel, the former center of the international online trading scammer community, have had to lease Israel and have settled in Sofia or Kiev. Gal BARAK, the wolf from Sofia, has its headquarters there and coordinates a Europe-wide network of boiler rooms. According to insider estimates, Gal BARAK has stolen more than EUR 200 million from small investors in the last 6 months alone. The corresponding data is available on FinTelegram.

Against this background, we expect the new aggressiveness of BaFin and BKA to finally result in coordinated measures resulting in the arrest of these fraudsters. This is the only effective way to protect retail investors.

No, It’s Not A New Phenomenon

The only point we are not agreeing with BaFin in its warning is that these are new scams. This does not correspond to reality. This type of fraud has increased dramatically across Europe since the financial crisis of 2007/2008, causing billions of dollars in losses to small investors. FinTelegram is a member of an international task force to combat scams in the online trading sector and has access to relevant information.

ESMA has accordingly imposed an EU-wide ban on the marketing, distribution, and sale of binary options to private customers with effect from 2 July 2018. It was also ESMA that put massive pressure on the Israeli authorities to take action against the binary options providers and the huge call centers in Israel (as early as spring 2017). Only a few days ago, BaFin opened a hearing on a corresponding ban in Germany, which is to come into force when the ESMA directive expires.

Don’t Forget The SEO Perpetrators

But it is better to be late than not at all. What is missing in the report is an indication of the clever SEO marketing measures with which these fraudulent online platforms work. Some of them operate their own media platforms and pretend to check the offers “seriously” from a third party perspective and evaluate them positively in their media websites. These binary options/forex/crypto providers operates exclusively in the Web. They are top edge experts in affiliate schemes, network marketing, and SEO. They actually drive retail investors towards these fraudulent online trading platforms.

But as said, rather late than never! In this respect a step in the right direction from the authorities.