The Federal Court of Australia has ruled in favour of ASIC case against Gallop FX. The firm has been providing financial services without holding the required licence and has also engaged in deceptive conduct.
September 9, 2019, | AtoZ Markets – In an interesting turn of events, the Australian Securities and Investments Commission (ASIC) has received a favorable judgment on Thursday.
ASIC has announced that the Federal Court of Australia has ruled in its favour in the legal tussle against Gallop International Group Pty Ltd (GIG), which is currently in liquidation, and also Gallop Asset Management Pty Ltd (GAM), Stumac Pty Ltd and Mr Ming-Chien Wang, the company’s ex-director.
Both GIG and GAM firms are jointly operated by the Gallop enterprise, with each one of them holding a license of the Australian Financial Services (AFS.) The company is known for providing trading services for Forex, precious metals, forex, derivatives, as well as contracts for differences (CFDs).
The Legal Proceedings
Justice Charlesworth of the Federal Court of Australia has proposed orders and given the parties time to for an appeal to the court’s decision, but if the defendants decided not to do so, the Court will make the proposed orders on September 26, 2019, including:
- declarations of contraventions of financial services laws by GIG;
- declarations that Mr Wang was knowingly concerned in the contraventions of GIG;
- permanent injunctions restraining Mr Wang from carrying on a financial services business;
- an order disqualifying Mr Wang from managing a corporation for 10 years;
- an order that Mr Wang pay a civil penalty of $3 million; and
- the winding up of GAM and Stumac.
Back in 2017, the Australian watchdog had gotten interim junctions against the abovementioned firms and the former executive. Those junctions let the watchdog close the Gallop operations. The watchdog also received additional junctions to freeze the local banking accounts of the involved entities.
ASIC vs Gallop FX case in brief
Gallop’s legal issues started after customers complained to the authority that the company withheld their investment funds and in some cases earnings from investments. The platforms’ clients were predominately residents of mainland China and Taiwan
The Aussie regulator discovered that in the period between May 2016 and May 2017, the GIG’s banking account received deposits of more than AU$36 million, with the majority of those funds coming from investors.
During this time frame, the funds were transferred to banking accounts in international locations, managed by GIG’s associates and people somehow connected to Wang. Additionally, the Court found out that GIG was operating a financial services business without holding the appropriate licence.
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