CySEC suspends CIF license of binary options broker

Cyprus financial regulator CySEC has taken measures to suspend the CIF license granted to WGM Services Ltd., parent of binary options broker EZTrader also owns and operates the and brands, and the which targets the Chinese market.

EZTrader reported revenues of $7.95 million for the first six months of 2014, but was losing money. The company raised $3.94 million from investors in May 2014, bringing its cash level to $6.95 million as at June 30, 2014. The Company recently entered into sponsorships of leading soccer clubs in Germany and The Netherlands, Bayer 04 Leverkusen and Feyenoord Rotterdam.

The company is run by founder and CEO Shimon Citron. Its board of directors includes private equity fund pros Ron Lubash, CEO of Markstone Capital Group, and Gustavo Perrotta, Managing Partner of Hamilton Ventures LLP.

cysecThe suspension was made by CySEC due to suspicions of alleged violations regarding:

  1. Safeguarding of clients’ funds,
  2. Own Funds, regarding the capital adequacy of investment firms. and
  3. Large exposures.

CySEC noted that the decision to suspend WGM was reached, even after taking into serious consideration that the above alleged violations may possibly endanger the interests of the clients of WGM Services Ltd brands and the operation of the capital market.

CySEC is giving WGM 15 days to take action in order to comply with the above violations. While the suspension is in force, WGM  brands cannot provide any investment services, and must close all open client positions if a client so wishes, and return to them all their funds and profits earned.

To see the CySEC release on the suspension click here.

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