ASIC has cancelled the AFSL of a retail OTC derivative issuer after its clients lost hundreds of thousands of dollars.
ASIC cancelled the AFSL of retail over the counter derivative issuer Forex Capital Trading Pty Ltd after an investigation found its business model disregarded key obligations of an AFSL and resulted in unconscionable conduct, misleading and deceptive conduct, and a failure to manage conflicts of interest.
ASIC also found that Forex CT “lacked sound ethical values and judgement in dealing with clients” and failed to ensure its representatives were adequately trained and complied with financial services laws.
Forex CT offered clients opportunities to trade in contracts-for-difference (CFDs) and margin foreign exchange contracts (FX Contracts). ASIC’s investigation identified clients incurring large losses of hundreds of thousands of dollars, including from their superannuation accounts, as a result of investing in CFDs and FX Contracts.
“ASIC continues to focus on conduct by AFS licensees who operate business models that harm consumers,” said ASIC commissioner Cathie Armour.