On the 12th of February 2013, it was announced that eToro was to be fined 50,000 Euros by Cysec. However this particular fine issued by Cysec was particularly bizarre in nature, with eToro not being fined for current regulatory breaches but rather for alleged breaches of regulation all the way back in 2010. From the Cysec announcement:
The alleged weaknesses concerned the organisation/operation structure (articles 18 and 36 of the Law) of the Company in their early operation days (2010) and the Company has since then rectified the alleged weaknesses and is now in compliance with the requirements of the Law.
Such a fine appears very odd considering it has been issued in 2013, nearly three years after the wrongdoing was alleged to have taken place. This can either been seen as gross incompetence on the behalf of Cysec, in no world should it take a financial regulator three years to issue a fine for wrongdoing. Alternatively, the new Cysec policy regarding the back fining of companies for breaches of regulation can be seen as a revenue raising method as alleged in this LeapRate article which accuses Cysec of shaking down brokerages in order to be able to fund itself. Alleging that cuts by central government have led to a decrease in funding for the organization. One certainly hopes that this is not the case and Cysec are just taking a tougher attitude towards the derivative providers operating from the island, however this doesn’t appear to be the case.
eToro have made no public remark regarding the fine and I doubt they will make public comment regarding such a back dated fine, especially considering the announcement from Cysec states that eToro are now in full compliance with the requirements of the Law. This fine seems to be the continuation of a bizarre period of actions from Cysec the regulatory authority of Cyprus.