Commercial organisations have employed the principle of associating a celebrity with their products or services to inspire trust and confidence for decades. There has been a move away from the traditional use of famous faces which has been replaced with the rise of celebrity endorsement across social media. The ease with which celebrity endorsement campaigns on social media can reach the public and influence them has been recognised by financial fraudsters who have used this method of marketing to offer high-risk investments to deceive and cheat the public.
The Financial Conduct Association (FCA) estimates that investors in the UK have lost hundreds of thousands of pounds investing in contracts for difference (CFD) investments offered to them by fraudulent investment brokers via the use of unauthorised celebrity endorsement on social media.
Joanna Bailey an associate in the financial and banking litigation team commented "the fraudulent investment brokers do not have a presence in the UK but work out of Cyprus where they obtain regulatory status through the passporting rights between the FCA and the regulating body in Cyprus, Cyprus Securities and Exchange Commission (CySEC)." Joanna further remarked "the use of fake celebrity endorsement encourages people to trust the firms. Whilst the FCA has finally taken steps to stop such firms it does not give the investors their money back. Giambrone is mounting a class action in Cyprus against one of the most prominent fraudulent brokers, Rodeler Ltd (trading as 24option) and have developed a strategy designed to force Rodeler Ltd. to repay the individuals they deceived."
The FCA has removed the passporting rights from Rodeler Ltd. and other rogue investment brokers, this is the first time the FCA has used this option to prevent financial investment scams. The FCA's Executive Director of Enforcement and Market Oversight, Mark Steward, confirmed the removal of passporting rights from the firms saying "The FCA has removed passporting rights for these firms which effectively stops them from continuing to provide these types of products in the UK. We welcome the further action taken by the CySEC. The FCA's investigations into the sector are continuing." Since the FCA's statement, Cysec has also fully removed all regulatory authorisations. The Italian regulator the Commissione Nazionale per le Societa e la Borsa ("CONSOB") has also prohibited Rodeler Ltd. from attempting to offer investment opportunities in Italy.
Financial investments such as CFD are unsuitable for novice investors as they are high risk. A number of individuals have lost in excess of £100,000 having been encouraged to take out credit to make the payments. A well-known practice that Giambrone's financial and banking litigation team are very familiar with. A class action is an extremely effective way of demonstrating to a court that the many victims were subject to a scam. It immediately becomes clear that the rogue investment broker was repeatedly perpetuating the same deceit with the sole purpose of deceiving the victim and obtaining their money. The opportunity to join the class action in Cyprus against Rodeler Ltd. to force the return of lost funds is still available. Thus far Rodeler Ltd. has refused to return the money taken from its victims and it is unlikely that, without legal pressure, they will voluntarily hand back any money.
For further information about joining Giambrone's class action against Rodeler Ltd. trading as 24 Option please click here
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