The Board of of the CySEC issued a release today for existing clients of Falcon Brokers Ltd, informing them that Falcon Brokers lost its Cyprus Investment Firm (CIF) authorization in March of this year for not complying with section 28(1) of the Investment Services and Activities and Regulated Markets Law of 2007.
Under existing financial regulations in Cyprus, firms that lose their license are required by law to wind down all operations and refund all customer funds within three months.
However, the CySEC said that Falcon Brokers has not followed procedure and existing clients will now have to seek restitution from the Investor Compensation Fund (ICF). The regulator also mentioned that Falcon Brokers has not responded to CySEC inquires since March:
“The CySEC has not been able to communicate with the Company from the date of the withdrawal of its authorization, as the Company’s contact number seems to be disconnected.“While the Falcon Brokers' telephone number has been disconnected, their website is still up (new.falconbrokers.com) and it would seem that the firm is still signing up new clients through a different sub-domain (sys.falconbrokers.com), which has a different phone number. Additionally, Falcon Brokers claims on their webpage they are still regulated by the UK Financial Conduct Authority (FCA) and the German Federal Financial Supervisory Authority (BaFin).
However, upon checking the registration numbers provided by Falcon Brokers with both financial regulators, a different story begins to surface. The FCA registry says that Falcon Brokers was previously authorized (Reg. No. 565054) but is no longer allowed to conduct business in the UK:
Querying the BaFin registry with ID number 125737 - the number provided on the Falcon Brokers homepage for BaFin - does not even return any results related to Falcon Brokers Ltd. At press time, it doesn't appear that Falcon Brokers is regulated by the FCA or BaFin.
The CySEC has directed former Falcon Brokers clients in Cyprus to start familiarizing themselves with the claims process and the necessary paperwork:
“All affected clients (covered clients of the Company) are invited to study the I.C.F. Directive as well as the information for the submission of compensation applications found on the CySEC’s website and take all appropriate actions for the submission of their claims.”