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Trade12 turns up in Brazilian warning, gets fined

The Brazilian Securities Commission (Comissão de Valores Mobiliários – CVM) has joined the host of national regulators who have issued warnings against the unregulated offshore forex broker Trade12 and its owner Exo Capital Markets Limited.

According to CVM, the company is not authorized to attract clients and provide financial services in Brazil, but has done it. Since this is a violation of Brazilian law, the regulator imposes a fine of BRL 1000 ($314).

Trade12 has been on the market for several years and offers a wide range of instruments. It, however, is registered in the offshore zone Marshall islands and is not regulated. On its site the company claims it has a “regional office” in Estonia.

Many of its clients are accusing the company of being a scam. According to client comments on our review of Trade12, it seems to be employing the usual scam tactics of demanding more money to be deposited, refusing withdrawals and deliberately making clients lose money. The same accusations are being made on the broker’s Facebook page and in various forums.

For those reasons, various national regulators have issued warnings against Trade12. In 2016 alone, there have been alerts from New Zealand’s Financial Markets Authority, Italy’s CONSOB and the Cyprus Securities and Exchange Commission. Russia’s self-regulatory organization KROUFR blacklisted Trade12 over client complaints. In 2017 the  Australian Securities Investment Commission (ASIC) has also added the broker to its warning list.

As we have always said, dealing with offshore and worse – unregulated brokers – is very risky and can lead to big losses for the client. Not that trading with properly regulated and reputable brokers is not risky, but at least those companies are subject to oversight and usually are required to be members of some sort of a client compensation scheme. Of course, not regulators are equally strict, but UK’s Financial Conduct Authority (FCA) and ASIC have a reputation of tight requirements and oversight.



TAGS: trade12  warning  brazil  cvm 
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