ASIC has banned Mr Steven Marsh, a former employee of Forex Capital Trading Pty Ltd (Forex CT), from providing financial services for a period of three years.
Forex CT employed Mr Marsh as an account manager between 19 February 2018 and 20 March 2019. During this period, Mr Marsh engaged with clients to trade in contracts-for-difference (CFDs) and margin foreign exchange contracts (FX Contracts).
In making the banning order, ASIC found Mr Marsh:
- has not complied with financial services law;
- is not adequately trained or is not competent to provide financial services; and
- is not a fit and proper person to provide financial services.
ASIC found Mr Marsh made misleading representations to clients, including that:
- clients would make profits trading with Forex CT when there were no reasonable grounds for making such representations, given that an investment in a CFD is a speculative high-risk investment; and
- clients reduced the risk of incurring trading losses if they made increased deposits into their trading accounts, when in fact increased deposits would have the effect of placing more client money at risk.
ASIC also found Mr Marsh engaged in unconscionable conduct. This included engaging in high pressure sales strategies and unfair practices in order to encourage clients to make deposits or delay or cancel client requests to withdraw their own funds from their trading accounts.
In finding that Mr Marsh is not adequality trained or competent, ASIC found Mr Marsh failed to provide the general advice warning when giving general financial advice and, on several occasions, provided personal advice.
Mr Marsh has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision.
Background
On 28 May 2020, ASIC cancelled Forex CT’s Australian financial services (AFS) licence after finding Forex CT’s financial services business model disregarded key AFS licensee obligations and resulted in unconscionable, misleading and deceptive conduct. [For further information, see 20-128MR]
The size of the Australian market for OTC retail derivatives has grown considerably over recent years. With that growth, there has been a dramatic increase in complaints to ASIC in relation to conduct within the OTC retail derivatives market. ASIC has and will continue to take strong regulatory action to protect consumers of these products.
ASIC is considering feedback on its proposals in Consultation Paper 322 Product intervention: OTC binary options and CFDs (CP 322). ASIC consulted on making market-wide product intervention orders to address concerns about significant detriment to retail clients from trading OTC binary options and CFDs.