The UK's Financial Conduct Authority has taken action to stop four Cypriot investment firms from continuing to offer contracts for differences to investors.

Hoch Capital Ltd (trading as iTrader and tradeATF), Magnum FX (Cyprus) Ltd (trading as ET Finance), Rodeler Ltd (trading as 24option) and F1Markets Ltd (trading as Investous, StrattonMarkets and Europrime) - all apparently regulated legitimately by the Cyprus Securities and Exchange Commission (CySEC) - used social media and web-pages that carried allegedly fake endorsements from celebrities to entice consumers into their alleged scams.

The FCA says that the "unauthorised celebrity endorsements" - as opposed to the authorised kind - appeared on social media as part of the firms' marketing efforts. It has issued orders that require them to stop selling these derivaties to British customers, to close existing positions with those customers, to return those customers’ money and to notify them of the FCA’s new policy.  

The firms are entitled to ask the Upper Tribunal to review of the FCA’s action. The FCA guesses that British investors have lost hundreds of thousands of pounds in these investments. None of the firms or its operator has an office in the UK; instead, they 'passported' their services into the UK because both countries were once members of the European Union, whose 'passporting' arrangements will remain a fixture of British financial services until the end of the year. The FCA, moreover, believes that the firms withheld some money that they owed to investors, charged customers undisclosed fees and failed to tell them about the risks of trading in the derivatives. Some customers lost more than £100,000.

The FCA has induced CySEC to cease to allow Rodeler Ltd and Hoch Capital Ltd to operate has and partially suspended its authorisation of the activities of Magnum FX (Cyprus) Ltd and F1 Markets Ltd. The latter may only provide investment services to their existing non-UK-resident clients and must not promote the provision of their investment services or take on new clients. CySEC has also told them to stay away from the UK.