The Financial Services and Markets Authority (FSMA) warns the public against the activities of various companies that are operating unlawfully in Belgium.
This applies to the following companies:
- Gato Capital Partners (https://gatocapitalpartners.com/)
- Compass Consulting Group (http://www.compassconsultinggroup.co.uk/)
- J Mckenzie (http://www.jmmckenzie.com/ (currently inactive)) and McKenzie International Investments (https://mckenzieinternationalinvestments.com/)
- Sapone Trading (http://www.saponetrading.com/)
- Bryon-Stafford (https://byron-stafford.com/)
- Larkin Asset Management (http://www.larkinassetmanagement.com)
These companies are not allowed to offer investment services in or from Belgium.
The FSMA thus strongly advises against responding to any offers of financial services made by these companies and against transferring money to any account number they might mention.
According to the information available to the FSMA, it seems that the companies may be ’boiler rooms’.
’Boiler room’ fraud involves contacting consumers, usually unsolicited and often by telephone, offering to sell them shares or other financial products and services. In recent times, the services offered have become more varied. Thus, portfolio management services, term deposit accounts, investment advice, investments in crowdfunding projects, etc., have been offered.
Although the ’boiler rooms’ often claim to be authorized service providers with a professional website and forms to fill out, they are in reality swindlers who offer fictitious or worthless services.
As a rule, the consumer is enticed to make an initial, limited investment that very soon appears to be profitable. After that, the consumer is asked to make more and more additional investments. But unlike with the first investment, the new investments lose money and/or when a consumer asks for his or her money back, it turns out to be impossible unless he or she makes further payments.
The fraudsters often do not hesitate to put the consumer under severe pressure to deposit more and more money (hence the term ’boiler room’). In the end, the investor will never get his or her money back.
More generally, the FSMA offers you, the investor, the following recommendations to protect yourself against such fraudulent practices:
- Always verify the identity of any company that is offering you financial services (company name, registered office, etc.). If the company cannot be clearly identified, it should not be trusted. If the company is located outside the European Union, be aware of the difficulty of legal recourse in the event that you find yourself in a dispute with the company and wish to take legal action.
- Determine whether the company holds an authorization. You can do so by consulting the lists published on the FSMA website – Check your provider.
- Consult the warnings published on the websites of the FSMA, foreign supervisory authorities or IOSCO. Check whether the company offering you financial services has been named in a warning. Don’t just search by the name of the company(ies) that is/are offering or have offered you financial services, but look also under the name of the company(ies) to which you are asked to deposit money.
On the FSMA website, there is a search function that you can use for this purpose. Moreover, all the ’boiler rooms‘ about which the FSMA has already published a warning are included on the list of companies operating unlawfully in Belgium that is also available on the FSMA website.
Take note: just because the company you are looking for does not appear on the list of warnings does not necessarily mean you can trust it and assume it holds the requisite authorization to offer financial services. The FSMA does everything it can to publish warnings in a timely manner, but it is entirely possible that it is unaware that a company is engaging in unlawful activities in Belgium. One of the reasons for this is that companies acting in bad faith regularly change names.
- Be wary of ’cold calling‘: you are contacted by telephone or email with a financial offer although you have not made any prior request. Such contacts are often the first step in a fraudulent practice.
- Be careful if you are asked to transfer money to a country that has no connection to the company or to your country of residence. Be aware that in cases of ‘boiler room’ fraud you are usually asked to transfer money to bank accounts opened with banks based in Asia.
- Be sceptical if you are promised completely disproportionate returns. Fraudsters often make it seem from the outset as if the investment has earned substantial returns. Things only begin to go wrong when the investor asks to withdraw his or her money.
- Do not accept uncritically the information provided by such companies. Sometimes a company claims that it is authorized to offer financial services although this is not in fact the case. Always verify the information you are given.
- Be wary of ‘cloned firms’. These are companies that pass themselves off as different, lawful companies even though they have no actual connection to them. By comparing the email addresses or contact details of the companies in question, you can detect this form of fraud.
- Ask your counterparty for clear and comprehensible information. Never invest in a product if you do not fully understand what is being offered.
- Be suspicious if you are asked to make an additional payment or to pay a tax as a condition for the pay-out of your returns. These additional demands are often a sign of fraud.
- Company managers and directors need to be especially careful. Many ’boiler rooms‘ are targeting those groups in particular.
If you have the least doubt about the lawfulness of an offer of financial services, feel free to contact the FSMA via the consumer contact form on its website. As well, please feel free to notify the FSMA of any suspicious company you have encountered that has not yet been the subject of a warning published by the FSMA.