ASIC has launched civil penalty proceedings against Union Standard International and its former corporate authorised representatives for a slew of AFSL breaches.
ASIC alleges that Union Standard provided financial services including trading in margin FX products to Chinese clients in circumstances where it was illegal for them to deal or trade in foreign exchange products, exposing its clients to administrative and criminal penalties under Chinese law.
ASIC also alleges that Union Standard failed to ensure that it provided financial services efficiently, honestly and fairly; provided unlicensed personal advice to clients; made false or misleading representations to clients about the level of risk involved in their products; and engaged in unconscionable conduct, including using high-pressure sales tactics and facilitating trading by clients who were disadvantaged by their low level of income and lack of understanding about the products.
“Regulators in many jurisdictions have restricted or prohibited the provision to retail investors of certain OTC derivatives, such as binary options, margin foreign exchange and other contracts for difference (CFDs),” ASIC said in a statement.
“In April 2019, ASIC put AFS licensees on notice that in addition to overseas consequences of potential breaches of overseas law, ASIC will consider whether breaching overseas law is consistent with obligations under Australian law to provide services ‘efficiently, honestly and fairly’.”
Union Standard is currently in liquidation. The proceedings encompass its former corporate authorised representatives, including Maxi EFX Global (trading as EuropeFX) and BrightAU Capital (trading as TradeFred, and also in liquidation).