CONSOB Banned 23 Financial Operators In Italy

CONSOB, the supervisory authority for the Italian financial products market, has been granted special and extraordinary rights with a view of protecting investors and combat abuses, including fraud in the network, up to the blocking of investment products, that is, interference with the aim of blocking production, in accordance with the European Union directive Mifid2.

CONSOB has the authority to issue orders to terminate the activities of financial intermediaries involved in illicit lending.

In accordance with the authorized powers, from the beginning of 2018 CONSOB issued 

• 23 orders to terminate the activities of financial operators, 

• 7 warnings on the protection of investors' rights,

• 30 notifications to competent law enforcement agencies for conducting investigative actions against unscrupulous operators.

CONSOB monitors in detail 3 websites daily, often at the request of financial market operators, signaling violations, in particular related to the extremely high profit (up to 5% per day) of investment proposals. So far, CONSOB activities have been of a notification nature, limited to warning investors of illegal financial activities, but since 2018, its rights have been significantly expanded, also acquiring a repressive nature, up to a mandatory order to terminate the activities of unscrupulous financial operators. The most frequent enforcement practice of CONSOB concerns the requirements for providers to close websites and portals offering investment packages and services without the permission of the relevant supervisory authority.

Most often, the activities of unscrupulous operators are focused on contracts for difference (Cfd), binary options and, more recently, for crypto-currencies, although, as noted in the annual report of the Italian financial products market regulator, it would be more correct to call cryptocurrencies in general crypto assets, since some cryptocurrencies are essentially currencies, while others are utilities or investment resources.

In order to fill the gaps in the current legislation, in particular, concerning cryptocurrencies, and to limit the application of sanctions solely to knowingly unfair business activities, CONSOB plans to release practical guidelines and handbook in the near future.

In addition, CONSOB activated two telephone lines and a telematic connection channel for receiving messages about unscrupulous financial operators. Messages cannot be filed anonymously, but the supervisory authority for the Italian financial products market guarantees the protection of personal data of whistle blowers.