If Belgium can banish ‘binary options’, then why can’t we, asks TONY HETHERINGTON
K.M. writes: Following a cold call to my mobile phone, I received an email from Metro Options Limited about investing in binary options. The email says a realistic earning potential on a £10,000 investment is £1,000 to £2,000 per week. I believe this is an unrealistic promise and a misleading claim. I hope you can warn people.
Mystery: Metro Options says disputes have to be dealt with in Anguilla (pictured)
Binary options are a scandal and Metro Options Limited is a scam. The company advertises that ‘Metro Options can boast some of the highest calibre of traders, analysts, risk management and technical support within the binary options sector’.
Really? According to Companies House, the business is owned by 27-year-old Kyle Snoxell, and has just one director, a 32-year-old Romanian named Miklos Attila. Both give their address as a business centre in London’s Docklands, and neither has ever been registered with the Financial Conduct Authority as any sort of broker or adviser.
I invited both bosses to say who their high calibre traders might be, and where they gained all their experience. There was no reply.
I also asked them about a little mystery in their company’s terms and conditions, which say they were updated on January 17, 2014 – a year and a half before their company even existed. Again, there was no explanation.
In fact, their terms and conditions are a load of nonsense. They say disputes will be considered by a court in London, yet in the very next paragraph they insist that disputes will go to an arbitration process and not a court. Even more confusingly, they say that any legal action must be brought in a court in Anguilla, in the Caribbean.
I suspect the whole set of rules is just a cut-and-paste job, lifted from other websites. Legal passages are said to come from a firm called RD-Law, but this is an Israeli firm, based in Tel Aviv. Its chief executive, Tal Itzhak Ron, told me he had never heard of Metro Options.
He added: ‘Probably they have stolen parts of terms and conditions they have found on the internet.’
The complex where Folkestone fruit wholesaler is based
Like the Israeli law firm, I had never heard of Metro Options until you contacted me. Miklos Attila was unknown as well. But I have come across Kyle Snoxell before.
His name has cropped up at two investment firms that have attracted the attention of the City of London Police. Neither firm is still operating.
There are more question marks hanging over Snoxell and his business. If Metro Options is legitimate, why would some investors be asked to send their money to a separate company, Woolpack Brookland Services Limited, which describes itself as a fruit wholesaler based in Folkestone?
I asked its boss, marketing consultant Theodoros Kouniaris, but he did not respond.
Of course, Metro Options is just one company among many dozens that have climbed aboard the barely regulated binary options bandwagon. This is the fault of the people we all rely on to protect us from scams.
The Financial Conduct Authority regards binary options as gambling, plain and simple, so it does not regulate this. The Gambling Commission only regulates binary options companies if they are physically based in Britain.
Because some European Union countries treat binary options as investments, Brussels demanded that Britain falls in line. More than a year ago, the Treasury began an initial consultation on the European Union rules and stepped this up in March of this year.
It now says: ‘We are carefully considering the responses received to the consultation and will publish a response in due course.’
Fine, but meanwhile British investors, lots of them elderly or vulnerable, are being ripped off to the tune of many millions of pounds.
It seems we are still in thrall to Brussels, despite Brexit.
This is a mystery in itself. Belgium – hardly a major financial centre – has just banned binary options completely. Its financial watchdog says binary options are ‘marketed aggressively and are extremely risky, often involving transactions over a short period and without any connection to the real economy’. In other words, the spin of a coin.
The country’s consumer affairs minister, Kris Peeters, announced: ‘It will be clear to everyone that binary options and other speculative derivatives have no place on the Belgian retail market.’
So while our Government and our watchdogs faff about trying to turn gambling into a respectable, regulated investment, little Belgium has shown what can be done.
How about it, Whitehall and Westminster – what’s holding you back now?
If you believe you are the victim of financial wrongdoing, write to Tony Hetherington at Financial Mail, 2 Derry Street, London W8 5TS or email firstname.lastname@example.org. Because of the high volume of enquiries, personal replies cannot be given. Please send only copies of original documents, which we regret cannot be returned.