AFM Imposes €15K Fine on 24option Operators in the Netherlands

The Authority for the Financial Markets (AFM) of the Netherlands today announced that it has imposed a fine of EUR 15,000 on Rodeler Limited and its local unit Rodeler (NL) BV for violations of Section 5:20 of the General Administrative Law Act (Awb).

Pursuant to Section 5:20 Awb, a party is obliged to cooperate with a regulator. Rodeler NL and Rodeler Ltd have not complied with this obligation. Violations of Article 5:20 Awb could trigger a maximum fine of €2 million, but the fines in this case are relatively low, at €15,000, considering the limited financial strength of both companies.

The regulator further explains that Rodeler NL and Rodeler Ltd operated online investment platform 24option.com, through which private investors could trade contracts for difference (CFDs). The AFM has launched an investigation to determine whether Rodeler NL required a license from the AFM for its actions and also wanted to determine whether Rodeler NL engaged in unfair commercial practices. During the investigation, the AFM imposed a penalty on Rodeler NL because the company did not provide the recordings of telephone conversations between Rodeler NL and customers that the AFM required, but Rodeler NL also subsequently failed to provide the AFM with a large part of the call recordings, thus having hindered supervision by the AFM and violated the obligation to cooperate under Article 5:20 Awb.

In addition, according to the regulator, the Cypriot parent was imposed the penalty because the leadership at Rodeler Limited supersized the Dutch unit for the violations.

Prior to this penalty, the Cypriot regulator withdrew Rodeler's Cyprus Investment Firm(CIF) license earlier this year due to the company's decision to expressly renounce it, Fazzaco reported.