ASIC said Invast has paid $20,400 in penalties after it was issued two infringement notices by the corporate regulator, following concerns that emails and statements on Invast’s website misled consumers about the inherent risks of trading foreign exchange and derivatives.
“The representations on the website contained a link that invited investors to download a demonstration to undertake 'risk-free trading' of contracts for difference (CFDs) for foreign exchange,” a statement from ASIC said.
“ASIC was concerned that a reasonable investor may be misled into believing that the platforms promoted in the demonstration involved risk-free trading, rather than understanding that the demonstration account was risk free,” it said.
“ASIC was [also] concerned that a statement on [Invast’s] website that 'Forex CFDs allow you to buy one currency whilst simultaneously selling another' was misleading because CFDs are derivatives,” the statement said.
ASIC deputy chairman Peter Kell said it is important for consumers to be aware of the risks associated with trading in CFDs and other derivatives.
It is important that consumers are aware of these risks and can make fully informed decisions when considering a particular investment strategy,” Mr Kell said.
“AFS licensees should ensure the content of their promotional material does not contain any false or misleading statements that misstate or underplay these risks and create unrealistic expectations for consumers,” he said.
