Spanish regulator warns of scam firms stashing cash abroad
24 Sep 15
Spain’s financial regulator has issued a warning about unauthorised firms scamming clients out of their money by transferring funds to accounts based abroad.
In guidance published by the Comisión Nacional del Mercado de Valores (CNMV), the body said the activities of ‘chiringuitos’, or scammers, are often masked under the guise of consulting services that charge clients a high commission for their investment.
The regulator said generally the dodgy firms will transfer money abroad on behalf of a non-Spanish company, as the offshore business is not authorised or regulated by the CNMV.
“The investments tend to be complex financial products in unknown foreign markets,” the paper reads, before pointing out that only authorised firms should have access to complicated products like foreign exchange derivatives.
The CNMV said one the main differences between authorised financial institutions and chiringuitos is that the former will invite investors to ask questions; scammers, however, are often reluctant to provide updated information and “try to make their targets feel ignorant and to trust them blindly”.
The financial watchdog advised investors to check if IFA firms are must be registered on a public registry, which indicates if they are authorised to give personalised investment advice, and also means investors will be protected if the company becomes insolvent.
To see the gallery of the CNMV’s warning signs click on the arrow on the image above.
