The Enforcement Committee of the French financial market regulator, the Autorité des Marchés Financiers (AMF), has issued a cautionary statement urging investors to exercise vigilance on a fraudulent automated trading service offered by Immediate Connect. The service has been aggressively promoted on the internet and social networks through deceptive advertisements and fake articles impersonating celebrities and reputable news websites.

Retail Investors Lured by False Celebrity Endorsement

According to investor reports received on 23 June, retail investors discovered the automated trading service via deceptive online content, including an article falsely attributed to a major national daily. The article featured an alleged interview with a prominent television presenter endorsing the service.

Upon expressing interest by filling out an online form, investors were swiftly contacted by a purported financial adviser, encouraging them to register on an unauthorized trading platform for investments in the foreign exchange market, crypto-assets like bitcoin, or derivatives on crypto-assets. However, when attempting to withdraw their supposed gains, investors were requested to pay a so-called capital gains tax in advance.

[Mise en garde] ⚠️ L'AMF et le Parquet de Paris appellent le public à la plus grande vigilance à l'égard de l'offre frauduleuse d'investissement en #crypto d’Immediate Connect ➡️ https://t.co/2ESL6wrcP2#Protection #Epargne pic.twitter.com/iiPmdVo7No

— AMF (@AMF_actu) November 17, 2023

When translated to English, it reads: “[Caution] The AMF and the Paris Prosecutor's Office urge the public to exercise the utmost vigilance regarding the fraudulent investment offer in #crypto by Immediate Connect.”

Blacklisting and Blocking Fraudulent Web Addresses

The AMF has received additional complaints regarding similar fraudulent offers from new internet addresses, suspected to be clones. The organization has flagged 18 additional web addresses. Some of these have already been added to the authority's blacklists. Others are in the analysis phase. Following a hearing at the Paris Court of First Instance on 9 October, websites linked to fraudulent offers were blocked at the AMF's request. The judge's rulings on 23 October pertain to specific websites associated with the fraudulent scheme.

The AMF emphasizes that only companies authorized as investment services providers in the European Union can offer brokerage services like automated or non-automated trading in forex or derivatives on crypto-assets. Digital asset service providers registered with the AMF are the only entities authorized to offer the purchase and sale, custody, or trading of crypto-assets to the French public through promotional communications.

Finance Magnates reported earlier that AMF had imposed a significant fine and a ten-year ban on France Safe Media (FSM), a tied agent offering CFDs through the Alvexo online platform. The regulator fined FSM €300,000 and barred it from acting as a tied agent and providing reception and transmission of orders service for a decade. Lior Mattouk, FSM's manager, received a €100,000 fine and a ten-year ban from managing or directing any entity operating as a tied agent.

FSM, operating as the tied agent of Cypriot investment services provider VPR Safe Financial Group Limited, faced enforcement actions based on five sets of breaches between January 2019 and September 2021. Additionally, FSM neglected to display mandatory risk warnings in its promotional banners for CFDs, violating regulations. The company failed to inform clients of its tied agent status and exhibited negligence in audit-related matters.

The Paris Public Prosecutor's Office underscored that the habitual provision of investment services by an unauthorized entity is an offense punishable by a fine of €1,875,000, and the illegal provision of investment services as a regular occupation is punishable by 3 years imprisonment for an individual.

Such actions may also constitute the offense of fraud in an organized gang, carrying penalties of 10 years imprisonment and a fine of €1 million for an individual and €5 million for a legal entity.