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Tuesday 19 April 2011

11-84MR ASIC obtains court orders against ‘Safety in the Market' for misleading or deceptive profitable trading statements

ASIC has obtained permanent injunctions and orders, by consent, against The Hubb Organisation Pty Ltd, which operates the business Safety in the Market, preventing it from making or publishing misleading or deceptive representations about its Safety in the Market trading methodology.

ASIC obtained the orders in the Federal Court of Australia in Sydney following an investigation into the activities of Safety in the Market. ASIC had commenced the court proceedings in December 2010 (refer 10-263AD).

Safety in the Market offers financial educational services including training courses and trading software. ASIC was concerned about statements made in Safety in the Market's promotion and advertising, which included statements such as, ‘Safety in the Market offers an effective, easy to follow trading system that has been proven to work in markets across the globe’ and ‘Our FREE 2-hour Trading with Safety Seminar will introduce you to a proven approach to profitable trading that works in up or down markets’.

By these statements, Safety in the Market represented that its Smarter Starter Pack, sold within its Active Trader Program, was based upon a ‘proven system’, a ‘proven methodology’ and a ‘proven approach to profitable trading’. In doing so, Safety in the Market

represented to members of the public that users of the Smarter Starter Pack would be able to trade profitably in financial products based on a proven methodology.

However ASIC’s investigation revealed that

Safety in the Market

did not have evidence that the Smarter Starter Pack teaches, or otherwise provides, a proven methodology for profitable trading in financial products.

Commissioner Peter Boxall said, ‘Licencees who offer financial products need to ensure that in making statements about performance or returns they do not mislead or deceive financial consumers. ASIC will continue to actively monitor the marketing material for these products and will take action where it believes the law has been breached.’

The Hubb Organisation Pty Ltd consented to:

  • a declaration that Safety in the Market engaged in conduct that was misleading or deceptive or was likely to mislead or deceive, by representing that its Smarter Starter Pack was based upon a ‘proven system’, a ‘proven methodology’ and a ‘proven approach to profitable trading’

  • a declaration that this conduct was in contravention of section 12DA of the ASIC Act and section 1041H of the Corporations Act

  • permanent injunctions stopping Safety in the Market from making representations that the trading methodology taught in its Smarter Starter Pack is a proven methodology for profitable trading in financial products

  • an order requiring Safety in the Market to send notices to every person who purchased its Active Trader Program, in which the Smarter Starter Pack is sold, informing purchasers of the basis for the court orders and the options available to them in the event they believe they have suffered any loss as a result of the representations

  • an order requiring Safety in the Market to include a disclaimer on its website and all future advertising and promotional material relating to its business, to the effect that its methodology is not a proven methodology for profitable trading in financial products and,

  • an order requiring Safety in the Market to publish corrective advertisements.

Last updated: 24/10/2011 12:00