The Australian Securities and Investment Commission (ASIC) began civil penalty proceedings in the Australian Court against Forex CT (Forex Capital Trading Pty Ltd) and its director, Shlomo Yoshai. Why did ASIC Sue Forex CT and its director?
17 July, 2020 | AtoZ Markets – Forex CT is a Forex & CFD trading services provider. It also offers FX, Spot Metal CFDs, Cryptocurrencies, Index CFDs and Commodity CFDs (Futures). According to the company’s website, “We provide a plethora of resources to help you acquire the skills you need to trade with confidence and success, including webinars, workshops, eBooks and one-on-one support.”
ASIC Takes Forex CT and Its Director to Court
ASIC sued Forex CT (Forex Capital Trading Pty Ltd) and its sole director, Shlomo Yoshai. The regulator alleged that Forex CT “engaged in a system of unconscionable conduct, which was aided by Mr Yoshai”. Forex CT recommended inadequate trading strategies to its clients and used high tactics sales, such as offering incentives (credits and rebates) to encourage them to send more money to Forex CT. Besides, it made false or misleading statements to customers with the help of Yoshai.
Regulators accused Forex CT, with fostering an unhealthy culture that does not promote compliance with financial law and other regulation. Defendants also established and implemented incentives for customers to deposit funds. It also implemented disincentives for customers to withdraw funds from trading accounts. Defendants are subject to civil penalties of corporations of up to AU$2.1 million and individual up to AU$420,000.
ASIC also alleges that the company breached the prohibition of conflicting compensation under the Corporations Act. Forex CT is not acting in the best interests of its customers in providing personal advice by corporate law. These alleged violations attract up to AU$1 million in civil penalties for businesses. ASIC also alleged:
“Mr Yoshai failed to exercise his powers and discharge his duties as a director in accordance with s.180(1) of the Corporations Act, a contravention that attracts a maximum civil penalty of $200,000.”
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