Raffaele Mincione, business in binary options between Israel, Cyprus and the Vanuatu islands: history of the raider party of Pomezia / 2

At the end of 2012 and less than two years after the foundation of his company Time & Life, as we told in the first part of this inquiry, Raffaele Mincione through the T & L is already in debt for 113.8 million euros. Yet seven years later the chronicles report the story of the London palace in Sloan Avenue 60 from which emerges his ability to sail, from consummate sailor which is, between Vatican and social security funds. But how did Raffaele Mincione's career begin?

The official version is contained in the curriculum vitae that the financier must present whenever he applies for a position as a counselor of a company, such as the Fiber 4.0 (formerly Retelit) of which he is president from March 2018 to the present. At 19, in 1984, the financier graduated in accounting from the ITc Arangio Ruiz of Rome with excellent grades. Part for England where between 1985 and 88 he studied economics and historyUniversity College of London. In 88 enter the Goldman Sachs of the City where it sells bonds to Italian and Ticino customers. In February '90 he moves on to Credit Lyonnais Euro-Securities as a senior seller of Italian bonds. In July 1993, the first important step: he became head of the Italian fixed income desk in the London branch of the then Industrial Bank of Japan. From February 1995, it passes to the competitors of Nomura for which he becomes head of the Italian bond desk. In May 1997 another leap: for Merrill Lynch is the head of the European derivatives desk in London and then of the Latin American derivative desk a New York. The swirl of management positions in the banking finance sector continues in January 2000 when Mincione becomes head of the European derivatives for the banking sector for SSB-Citigroup.

Get on your own – At this point something happens: Mincione leaves managerial roles in the banks and sets up on its own. As the sole shareholder, and since 2007 with his younger brother Massimiliano who replaces him as an administrator, Mincione founded and administers the Gecko Wealth Management, a London based company that deals with financial consultancy for third parties. His job as a financial analyst is to buy and sell investments through their "stressed" debt, that is, the default risk bonds. In January 2007 he leaves the GWM helm to his brother and passes as "strategic consultant"To Crosby Capital Partners, where it remains until the end of 2008. From January 2009 it resumes its own business and buys the Capital Investment Advisors, another London-based limited liability company that is renamed Wrm Capinvest. In the meantime, he also found a way to work for a couple of other companies in New York: RM Realty Holdings Corp., a real estate company founded on 16 February 2000 in the Italian accountant's office Giuseppe Brusa, which on May 29, 2007 will lose a legal battle against a neighbor with a case that will make jurisprudence, and Beautiful Publishing Inc., a company that prints magazines on theItalian way of life, of which Mincione will be president and from which he will also pass Amedeo Angiolillo, the son of the "queen of the Roman salons" Maria and the former owner of the newspaper The weather, Renato.

From the US to Vanuatu – But the curriculum of Mincione does not say everything: what is missing, as often happens, is the most interesting part. To draw another piece of the network of relations between Mincione between the social security funds and the Vatican, we need to make some leaps on the other side of the Atlantic, in the United States, but also in Israel, in Cyprus, in Japan and in the middle of the Pacific Ocean, to the islands Vanuatu, to then return to Genoa. If you scan the Sec database, the Stock Exchange Commission which is a kind of "superConsob"American, there are many pieces of this mosaic. It turns out, for example, that twelve years ago a company that dealt with online games and bets, Zone 4 Play, incorporated in the state of Nevada on April 23, 2002, it changes its name to Win Gaming Media and creates an English joint venture with Virgin Media Television, which then gives way. On 5 June 2011 Wgm acquires 100% of the shares of EZTrader.com, one of the world's leading binary options sites, and on October 24 Wgm changes its name to Win Global Markets. On 3 June 2015, the company moved its headquarters to Delaware and from 26 January 2015 it changes its name from EzTrader Inc. to Eztd Inc. Eztd carries out its activities from two offices located in Nicosia, in Cyprus (Wgm Services Ltd), and Tel Aviv, in Israel (Win Global Markets Inc Israel Ltd), opens an office a Tokyo (Ez Invest Securities Ltd, established after the acquisition of 100% of Gkfx Financial Services Limited, a company that acts as an intermediary in foreign currency and is regulated by the Japanese "Consob" and one in Belize (Scgp Investments Limited), has subsidiaries in Australia (Eztd Australia Pty Ltd.) and Vanuatu (Ez Trader Ltd.) and employs 161 full-time employees. They are the companies of the group Ez Trader Ltd. registered in Vanuatu (an impenetrable tax haven) to hold regulatory licenses to operate Cyprus and Japan. Eztd is listed on Nasdaq, the New York Stock Exchange of technology companies.

What are binary options? – But how does the business of Eztd? What are binary options? And what does Mincione have in it? Unlike the "regular" options that are offered by different exchanges and which are contracts in which the customer pays the right to buy or sell an underlying asset (for example a listed share) at a certain price, binary options are complex financial derivatives, tools that for years have been presented as "simple"And have attracted many naive small savers through online sites, promising easy profits, but they often turn into traps that erode all the capital invested because investors in many cases are unable to understand the risks and dangers of these products. As written in the financial statements of Eztd, "A binary option is a type of option with a predetermined expiration time in which the result is simple: it returns a fixed amount of an exchange or nothing at all. The options are of binary nature because there are only two possible results. At the end of the option period the customer wins or loses. " And then: "Once a customer signs a contract, neither we nor the customer can modify the contract". For this reason binary options, according to Eztd, "are also called options"all or nothing'". The customer wins if and only if he "guesses" that the value of the underlying asset in the period considered Sara higher or inferior at a predetermined and immutable threshold, otherwise it loses everything. In addition, Eztd sets a certain minimum number of operations that the customer must carry out with the same number bets on the upside and downside of securities through binary options in a given period of time (a total volume of money exchanged): if the customer in the specified time reaches the volume of expected bets, is entitled to a Cash bonus. All mechanisms built to encourage customers to bet more and more.

24-hour business – In its 2015 financial statements, Eztd defines itself as "one of the pioneers of online binary trading secure and regulated and maintains its position as a leading, reliable and reliable operator of a business-to-consumer proprietary binary options platform ". Eztd offers "24 hour trading on 24, seven days a week, through the sites www.eztrader.com and www.globaloption.com on more than 120 activities in over 30 countries including raw materials, shares, currency pairs and indices available in more than 11 languages ​​". However, the online platform says "we generate our revenues mainly from the margin between winning customers and losing customers". In June 2013, the "Consob”Of Cyprus (la Cysec) authorizes Eztd to operate: thus the company through Cyprus can provide its services also in all the other Member States of theEuropean Union. But in an investor alert dated June 1, 2013, the SEC calls for binary options based on the price of a company's securities to be recorded in the USA as financial securities. As of 31 January 2014, Eztd thus prohibits the US and Canadian people to operate on its sites. Meanwhile, the Sec however it opens an investigation into unauthorized sales of binary options to US customers. About the 90% of Eztd's revenues derived from the European market: at 31 December 2015 and 2014 it had registered over 2,076,000 and 952,000 transactions with customers which at October 29, 2015, amounted to approximately 68 thousand.

The trouble starts – But the trouble does not take long to arrive. In June 2014, Eztd had about 4.2 million dollars deposited in Ccb, the fourth largest bank of the Bulgaria. On June 21, 2014, CCB blocks the funds of depositors without further explanation. Between November 20, 2014 and December 22, 2014, the Cysec suspends Eztd's authorization due to "a lack of customer funds". On November 6, 2014, the new Parliament of Bulgaria announces that it does not intend to save the Ccb, which goes into bail, and in January 2015 Eztd receives only 100 thousand euros from the Insurance Fund for Bulgarian deposits. Eztd loses $ 4.1 million and is forced to re-deposit one million dollars to return to work in Cyprus and the rest of the EU.

Marketing – Meanwhile, however, Eztd is marketing. In August 2014, he signed a sponsorship agreement with the Bayer 04 Leverkusen of the Bundesliga. In September 2014 she is a sponsor of the women's team of Vfl Wolfsburg, in October 2014 with the Swedish Aik Fotboll AB, in November 2014 with the German national handball team. In March 2015 with theEverton, in 2016 with the Rome and then with the Tottenham. All contracts destroyed by the teams after a few months.

Fines – The trouble continues. On March 2, 2015, Cysec fined Eztd for 10 thousand euros because the company continued to provide investment services through its websites even when the authorization was suspended due to lack of guarantee funds. On November 27, 2015, Cysec hits Extd with a second fine of 340 thousand euros for a series of serious violations, including some on the failure to comply with the rules against the recycling and self-laundering. The fact is, as Eztd writes in its financial statements, that "the customers of our program"Option affiliates"They represented over 50% of our new customers in the years ended December 31, 2015 and 2014. We consider the program an integral part of our marketing strategy," writes the company, which however admits that it does not carry out any anti-money laundering control on customers who enter through this mechanism of affiliated sites. On November 15, 2015, Consob fined the directors of Eztd for 20 thousand euros for having made the website and services of Wgm Services Ltd available to the Italian public from May 2012 to May 2013, before obtaining authorization from the Italian Control Commission.

Losses –But the troubles are not only regulatory: at 31 December 2015 the company has accumulated losses for 40 million 891 thousand dollars which sent the capital negative. Total net revenues in 2015 increased by 28.8% on an annual basis a 25.9 million dollars from the 20.1 of the year before and compared to 5.34 million in 2013, with a volume of options traded achieved equal to 97 million dollars in 2015 and 82.1 million in 2014. Is it possible that a company that generates exchanges for 97 million, on which, as we shall see in a short time, profit in four cases out of five, has accumulated losses of almost 41 million? According to Eztd yes.

The role of Perrotta – In this period the Italian is among the Eztd directors Gustavo Perrotta. Perrotta became director of Eztd on 16 May 2012 and from 23 March 2015 he became its president. Since 2009 Perrotta is the founder and was the administrator of Hamilton Ventures, a boutique of merchant banking based in London active in private equity. Before Hamilton Ventures, from 1994 to 2008 Perrotta was in charge of the division's London office Investment Banking of the Credit Suisse. It is (randomly) the same bank where Mincione, as we read in the first episode of this survey, according to Financial Times is introduced by Cardinal Bertone, and that manages part of the funds "off-balance sheet”Of the Vatican Secretariat of State. Perrotta graduated in Economics from the University of Rome "La Sapienza" and from 1991 and 1993 he worked in the audit of Arthur Andersen as senior auditor.

Enter Mincione – According to SEC data, at the end of 2015 Eztd is forced to look for new capital. To find them it emits gods warrants, ie options to subscribe new shares: 6.25 million warrants of Eztd, equal to 5.45% of the company, are subscribed on October 29 at 19 cents each Npv Europe Limited of London, whose beneficial owner is the Italian Giulio Gallazzi. On December 8th 2015 Eztd then stipulates a contract for the purchase of securities with Raffaele Mincione which provides the issue and the sale by the company, in a private placement, of 6.4 million shares a 25 cents per share, for a total amount of 1.6 million dollars that Mincione, like beneficial owner, paid December 10, 2015. From that same date, the names of the shareholders of Eztd disappear Npv Europe Ltd is Gallazzi.

Other troubles – But Eztd's problems get worse. On November 15th 2016 Eztd announces that it has reached an agreement with the Sec to close the investigation into the sale of binary options in the United States between 2011 and 2014. The Israeli company agrees to pay more than 1.7 million dollars for failing to disclose the risks of binary options trading that cost a 4 thousand US customers losses of 2 million dollars on 2.5 million invested. The Sec recalls that Eztd declared to investors that binary options were "highly profitable"When, in reality, there was a" significantly greater potential "for customers to lose money. "Eztd's revenues are largely derived from customer trading losses, yet Eztd emphasized the profitability of binary options trading," he says. Stephanie Avakian, deputy director of the SEC control division. "Companies operating in binary options must disclose more than general statements about investment risk, so that investors in these instruments understand that the odds play against them." According to the SEC, Eztd's option structure was created to make investors lose: about81% US customers had lost money: easy, when you can team up derivatives experts and structured finance that create contracts aimed at unsuspecting investors.

Investments – On February 3, 2017, but with effect from January 26, Eztd signs an agreement to reconstitute the capital in which investments are expected from 3 million dollars through the subscription of securities with Financiere St. Exupery Companies, a company of the Luxembourg group Lmc which has long been a shareholder of Eztd. Meanwhile, the managing director of Eztd, Shimon Citron, has terminated any contract with Eztd while remaining in office. But with two letters dated 6 and 15 May 2017, sent to the shareholders and also to Perrotta, Citron resigned as CEO of Eztd complaining about numerous irregularities against him and the non-payment of funds for one million dollars in Vanuatu. Meanwhile, in the newspapers there are reports of Israeli employees, who have dropped to fifty, who staged protests for the non-payment of salaries, connected to the closure of activities in the US. On 7 September 2017, the EZtd informs the SEC that it will no longer publish its accounts.

Unfortunate operation. Indeed no – The misadventures of Eztd, however, are not over. On 27 March 2018 the Esma, theEU authority for financial instruments, pursuant to the directive Mifid2 on investor protection prohibits the sales in the European Union of binary options to savers because they are too dangerous for customers. On September 27, 2018, the SEC brought Eztd into question because against the 1.77 million due between fines and reimbursements to customers, the company paid only 739 thousand. As of May 27, 2019 the legal action of the SEC against Eztd continues in the district court of Delaware. So far, Mincione's 1.6 million investment in Eztd would appear to have been alone an unfortunate operation. But what will happen next throws another light on the bet apparently lost by the raider.

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