New Fraud Failed: How Tradewin24 Tried to Cheat Serbian Investors and Eliminate Interactive Brokers
While the Serbian state was preparing in the autumn and winter of 2021 to reform the capital market by drafting a new Capital Market Law, the leading figures behind TradeWin24 were devising a way to exploit the moment and eliminate Interactive Brokers from Serbia and, even more importantly, to strip Serbian investors of their money through grotesque amendments to the Capital Market Law. The proposed changes amounted to a form of extortion against Serbian investors and, at the very least, represented monopolistic behavior. They would have been the first case of their kind in the developed world, especially in Europe. We bring you the details of TradeWin24’s attempt to destroy the Serbian capital market and how yet another of their plans ended in failure.
Shortly before the COVID pandemic, in 2019, the Ministry of Finance and the Government of Serbia decided that the Serbian capital market had to be reformed through the adoption of an entirely new Capital Market Law, primarily in order to align it with European regulation (MiFID II), and then also in an attempt to revive Serbia’s financial market with the primary goal of providing greater protection to domestic and foreign investors and creating a better environment for investment. At least on paper.
These plans of the Ministry of Finance had to be postponed because of the COVID pandemic, so the Government of Serbia approached the task more concretely only in October 2021, when it published the Draft Capital Market Law and opened it for public debate. The public was invited to review the text of the law and submit proposals or comments, although in substance the law did not change much that could significantly affect the average Serbian investor, who traditionally avoids anything connected with the domestic capital market anyway. And the small number of investors who do not avoid the domestic market probably possess an excess of courage and a certain dose of madness.
At the same time, the leaders of TradeWin24, known for defrauding Serbian investors, mocking the Securities Commission, and making a joke out of laws and justice, were devising a way to eliminate foreign brokerage houses and continue plundering domestic investors. Because how else can one describe the fact that buying a stock on a foreign market with a single click, fully legally through Interactive Brokers, costs 1 dollar, while through TradeWin24 it costs a full 250 dollars? The greatest paradox is that TradeWin24 itself uses Interactive Brokers to route investors’ orders for the purchase of shares, but then charges the investor 250 times more money. And that is without even mentioning TradeWin24’s other schemes. This alone is enough to classify them as loan sharks and extortionists without equal in Serbia or even in the Balkans.
These plans of the Ministry of Finance had to be postponed because of the COVID pandemic, so the Government of Serbia approached the task more concretely only in October 2021, when it published the Draft Capital Market Law and opened it for public debate. The public was invited to review the text of the law and submit proposals or comments, although in substance the law did not change much that could significantly affect the average Serbian investor, who traditionally avoids anything connected with the domestic capital market anyway. And the small number of investors who do not avoid the domestic market probably possess an excess of courage and a certain dose of madness.
At the same time, the leaders of TradeWin24, known for defrauding Serbian investors, mocking the Securities Commission, and making a joke out of laws and justice, were devising a way to eliminate foreign brokerage houses and continue plundering domestic investors. Because how else can one describe the fact that buying a stock on a foreign market with a single click, fully legally through Interactive Brokers, costs 1 dollar, while through TradeWin24 it costs a full 250 dollars? The greatest paradox is that TradeWin24 itself uses Interactive Brokers to route investors’ orders for the purchase of shares, but then charges the investor 250 times more money. And that is without even mentioning TradeWin24’s other schemes. This alone is enough to classify them as loan sharks and extortionists without equal in Serbia or even in the Balkans.
`Such a business model would not survive even in Sudan and borders on illegality, especially because TradeWin24 does not have transparent pricing, offers no fair market benchmark, and constantly misleads investors, which is also a violation of European regulation. A particular problem for TradeWin24 is foreign competition, specifically Interactive Brokers, the world’s largest broker, which allows investors from Serbia to invest and trade on foreign stock exchanges. With extremely low fees and the fact that it is itself one of the most important components of the global financial market, Interactive Brokers has established itself as the unavoidable choice for every investor in Serbia who cares about security, price, and efficiency. The fact that all Serbian brokers use foreign brokers as intermediaries for purchases, and that most of them use Interactive Brokers, has led to a situation in which, with greater investor awareness, domestic investors increasingly trade directly through foreign brokers, bypassing domestic “intermediaries,” because there is not a single reason why the purchase of a share should go through two middlemen instead of one that is incomparably cheaper.`
`Once they realized that this development, in which an ever larger number of domestic investors were investing through foreign brokers, made their predatory intermediary business meaningless and was leading TradeWin24 toward bankruptcy, and bearing in mind that TradeWin24 had no room to diversify toward the domestic stock exchange because it did not even have a license to intermediate on the domestic capital market, it comes as no surprise that in the minds of the schemers behind TradeWin24 there arose the idea of using the public debate on the Capital Market Law in order to remove their main competitor, the “foreign broker,” whether it be Interactive Brokers, Trading212, Charles Schwab, or anyone else.`
`BDD TradeWin24 came up with a plan that only such schemers and manipulators could imagine: to push through an amendment to the law that would regulate investing by Serbian investors on foreign markets and even introduce punitive provisions against such investors, who today make up almost 100% of investors in Serbia. What was this really about? In the public debate launched by the Ministry of Finance in October 2021, TradeWin24 immediately intervened. Naturally, it was not interested in any article of the law that would improve investor protection. The only thing it cared about was Article 203 of the law, which regulates the provision of services to investors in the territory of Serbia and also mentions foreign investment firms.`
Official goverment document confirms Tradewin24 proposed radical changes penalisizing Serbian investors:
To simplify. The geniuses at TradeWin24, in their effort to eliminate competition, proposed an amendment to Article 203 of the law by deliberately misinterpreting the article that speaks about the provision of investment services on the territory of Serbia, while ignoring the fact that Interactive Brokers and other foreign brokers do not provide services on the territory of Serbia, but rather to investors from Serbia, who send money to their brokerage accounts outside Serbia. This is, moreover, positively regulated by the foreign-exchange law in favor of Serbian investors, something the grifters from TradeWin24 know very well, which is why in their next comment they even demand that the Foreign Exchange Operations Law be amended as well, because it is allegedly in some kind of conflict known only to them. They go so far as to propose that Interactive Brokers and other foreign brokers be allowed to provide services only through a Serbian intermediary, all so that TradeWin24 can continue fleecing uninformed investors. Imagine if a French citizen were forbidden from trading through a broker in Germany. By that logic, the leaders of TradeWin24 should probably also stop using Google Street, Gmail, or Instagram, since those services are not registered in Serbia yet are provided to users in Serbia. If it were not ridiculous, it would be tragic. But that is still not the end. They even proposed giving investors in Serbia six months to adapt to their extortion scheme or face consequences. The hypocrisy and arrogance of TradeWin24 are astonishing, but even there their malicious minds did not stop.
Why do we call them malicious minds? Because not only did they want to prevent investors in Serbia from investing directly in foreign markets, they also shamelessly demanded PENAL provisions against investors who invest honestly through foreign brokers and refuse to pay tribute to TradeWin24. That is what was demanded by this cocaine brigade of fraudsters whose licenses were revoked by the Securities Commission at Sinteza Invest Group, after which they themselves withdrew the necessary capital, shut down Sinteza, left clients defrauded, and then opened a new brokerage house called TradeWin24. That is what it looks like when law and justice in the land of Zadruga are turned upside down. All comments on the draft law can be downloaded at the following link: mfin.gov.rs/sr/arhiva-1/javna-rasprava-o-nacrtu-zakona-o-tritu-kapitala-1.
Of course, such manipulation from TradeWin24 could not have passed even in countries far less serious than ours, but not because of the incapable Securities Commission, efficient regulation, or the rule of law, but exclusively because the adoption of such a law was required as part of Serbia’s alignment with European regulation (MiFID II), which is primarily concerned with investor protection through improved regulation and a better environment on financial markets.
At the end, TradeWin24’s demands were rejected in full because they were contrary to the Capital Market Law and the Foreign Exchange Operations Law, and with the new law entering into force in 2022, TradeWin24 remained exactly where it had always been, on a secure path to bankruptcy. We only hope that in that sad fate, more Serbian investors will not become victims, as is always the case with TradeWin24, formerly Sinteza Invest Group