The FinTel Ombudsman established recently by FinTelegram and EFRI has got a new case. As in the case of Maxigrid Limited, which is regulated by the Cypriot regulator CySEC, it is a regulated company involved in broker scams and investor fraud. Specifically, it is the CPT Markets Group with CPT Markets UK Limited, an entity regulated by the UK FCA with the reference number 606110 d/b/a CPT Markets UK and the domain www.cptmarkets.co.uk, and CPT Markets Ltd regulated in Belize with license no 314/126. In the following, we present the CPT Markets Group and its environment and briefly outline the case for the FinTel Ombudsman which hopefully can be concluded positively for the complainant.
Company history and beneficial owners
Like many of the smaller regulated financial service providers, the CPT Markets Group has a colorful past. The company was founded in 2008 by two Iraqi citizens and received a license from the UK FCA a few years later. Over the years the company’s name, shareholders, directors and trading styles have changed several times. Today the company is under the control of Chinese individuals. From Iraq via UK and Belize to China. It is therefore not surprising that CPT Markets now has many Asian clients.
The CPT Markets Group confirms on its two websites www.cptmarkets.co.uk and www.cptmarkets.com as well as by email that the two companies CPT Markets UK Limited and CPBT Markets Limited have the same beneficial owner and thus are centrally controlled group of companies.
CPT Markets Limited and CPT Markets UK Limited are owned by the same ultimate shareholder. However, the two entities are separate and distinct and are not connected by direct ownership (i.e. one is not a parent or subsidiary of the other).CPT Markets Email confirming identical ultimate beneficial owners
- Bin Ling, born May 1985, Director
- Zi Jian Wang (aka Zhijian Wang), born September 1981, (Person with significant control with over 75% of the shares)
Allen Market Limited, founded in December 2016 by the above-mentioned Chinese citizens, has a fully paid-up share capital of GBP 4,945,410 as of May 2020. Until June 2018 Bin Ling was also the majority shareholder but has since become the sole director only.
We can therefore de jure establish the hypothesis that CPT Markets Group is a group of companies controlled by these two individuals with Zi Jian Wang is its beneficial owner. Moreover, both CPT Markets UK Limited and Allen Market Limited are located at the same address at 40 Bank Street in Canary Wharf, E14 5NR.
Before the CPT Markets Group became Chinese, it was controlled by the two Iranian citizens Salam Fouad Al-Aswad, born in 1969, and Mahdi Kanbar-Agha, born in 1969, who also served as the company’s directors. They founded the company in 2008 under the name Azurite Markets Limited. Salam Al-Aswad remained a director until 30 August 2019 after the control was handed over to the Chinese individuals.
Misleading by design
The construction with the two companies of the same name is very likely to mislead customers. Particularly in the cyberfinancial space, the boundaries of nations and regulatory regimes are largely pointless. How should a private customer or consumer from Malaysia know with certainty which of the two CPT markets he is actually doing transactions with? But the difference is huge. For example, clients of the FCA-regulated CPT Markets UK are entitled to call on the Financial Ombudsman Services in the UK in case of issues and the Financial Services Compensation Scheme may compensate them for their loss in the event of insolvency. In addition, there is an established legal system in the UK for asserting claims against the company under civil or criminal law. None of this exists in Belize.
We know that many regulated brokers work exactly according to this pattern. On the one hand, they operate a nice regulated business that is best able to meet regulatory requirements. Compliance, however, is expensive and makes it demanding to generate profits. Therefore, regulated entities frequently maintain a second, unregulated or offshore regulated business where they do not have to comply with the regulatory requirements. It actually frees them from the regulatory regime of their home base. Some regulated brokers have established a “licensing model” and let third parties operate unregulated brokers or scams and provide the resources to do so. The regulated area is then only the visible tip of an iceberg.
In this way, the resources of the financial institution can be better used and high profits can be achieved through economies of scale. Very often at the expense of the customers of the unregulated area. It looks like the CPT Markets Group will also apply this business model.
There can be serious doubt as to whether CPT Markets has its own call centers and account managers at the address provided in Belize. It is more likely that the resources of CPT Markets UK will be used. Deliberately or frivolously misleading customers entitles them fo damage claims against the parties involved, i.e. CPT Markets UK and the controlling parent company Allen Market Limited. Moreover, it’s a serious and systematic violation of the FCA compliance framework. This, in turn, has to result in regulatory enforcement actions to stop violations.
The Complaint Case
A client of the CPT Markets Group has fallen into exactly this nirvana between FCA-regulated CPT Markets UK Limited and offshore regulated CPT Markets Limited. She has lost a lot of money and wants it back. The client’s money was transferred to an account with OCBC Wing Hang Bank Limited.
The customer suddenly lost her money with untraceable transactions when she wanted to end the business relationship. She complained. The CPT Markets Group – it is not clear which one – offered her a cooperation agreement after some discussions. She would have received just under 15% of the claimed amount. She would have had to waive all claims, however.
Neither letterhead nor the company’s legally required data are indicated on the compensation agreement. It seems totally frivolous. FinTel Ombudsman Service is trying to find a satisfactory solution for the client.
We will keep you posted on the complaint progress. Stay tuned.