UK regulator the Financial Conduct Authority (FCA) has launched proceedings in the High Court against an unauthorised adviser who has been targeting clients via Whatsapp and promising them significant profits if they followed their investment recommendations.
The FCA has accused 24HR Trading Academy (24HRTA) and/or its sole director, Mohammed Fuaath Haja Maideen Maricar, of using social media platforms to advise on and arrange investment deals without FCA authorisation from 2017 onwards.
It also claimed that 24HRTA and Maricar unlawfully made financial promotions without being authorised or having them approved by an authorised person.
The watchdog also alleged that Maricar “has been knowingly concerned in 24HRTA’s contraventions”.
The FCA secured an interim injunction to stop these activities from continuing and has frozen up to £624,311 ($777,737, €717,077) of the defendants’ assets pending further hearing.
Social media targets
24 HRTA was flagged by the FCA as an unauthorised adviser last September.
On its website, the London based firm said that “trading isn’t about sitting on a yacht with a laptop” and promises to help “normal people master the fundamentals of psychology to be able to find that unique trading style instilled inside them”.
According to the FCA, 24HRTA and Maricar transmitted “trading signals” and made investment recommendations to clients via WhatsApp and other social media platforms.
Clients were told if they followed the trading instructions, they would reap significant profits.
Customers were also encouraged to sign up with a “partnered” broker to make the trades, with 24 HRTA and Maricar receiving sign up and other commissions from the brokerages, alongside monthly payments from clients for the trading signals.
The FCA said it is seeking final orders from the court to prevent the defendants from giving unauthorised advice in the future and a restitution order that would distribute the defendants’ frozen assets to consumers who suffered financial losses.
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