$2533 a week is ball-dust, mate! Australian regulator slaps $30,600 fine on FX broker for dubious advertising

Notoriously observant Australian financial services regulatory authority ASIC has today announced that it has issued a $30,600 penalty to OCM Capital Markets for as a result of advertisements and emails which promoted the company’s FX platform. Whilst those outside Australia may not be so familiar with this particular name, it is the Australian-market brand name of […]

Notoriously observant Australian financial services regulatory authority ASIC has today announced that it has issued a $30,600 penalty to OCM Capital Markets for as a result of advertisements and emails which promoted the company’s FX platform.

Whilst those outside Australia may not be so familiar with this particular name, it is the Australian-market brand name of CySec regulated XForex.

During the last year, ASIC has made it clear to the investing public and to those in the FX industry that it has begun to take an extremely conservative view with regard to how leveraged margin FX is marketed and provided to retail customers.

Actions by the regulator have included several indications on its bi-annual enforcement reports that it is concentrating on ensuring that customers do not fall foul of FX scams, and that bona fide companies provide the correct risk warnings to their customers. ASIC has closed down companies, as well as revoked licenses, and has begun to show reluctance toward issuing new licenses to startup FX companies, preferring to concentrate on encouraging traditional investment and financial services in its jurisdiction.

According to ASIC, in this particular case, OCM made a number of claims in its advertisements and emails about the advantages of depositing into its retail FX offering, including “$2533 in Just 7 Days!” and “Learn how you can increase your monthly income”.

The regulator issued three fines, each to the value of $10,200, equaling $30,600 in total, the full amount of which has been paid by OCM Capital Markets forthwith.

ASIC believed that the advertisements and emails were misleading because:

They gave the impression that OCM’s service could be relied upon to provide substantial profits quickly and to consistently increase one’s monthly income, and also that they did not adequately convey that trading in margin foreign exchange derivatives and contracts for difference is high risk, provides volatile returns and does not guarantee consistent profits.

Thirdly, ASIC concldued that while they referred to risks and contained disclaimers, these messages were in fine print and were ineffective to correct the dominant message created by the headline claims.

ASIC Commissioner Greg Tanzer said “Margin foreign exchange and derivative trading is high risk and gives volatile returns. Consumers should not be misled by false claims about the level or consistency of returns achievable from such trading.”

Interestingly, ASIC considers the payment of an infringement notice not to be an admission of a contravention of the ASIC Act consumer protection provisions. ASIC can issue an infringement notice where it has reasonable grounds to believe a person has contravened certain consumer protection laws.

 

 

Read this next

Digital Assets

Sam Bankman-Fried might see his 25-year sentence halved

Sam Bankman-Fried, the founder of the failed cryptocurrency exchange FTX, was sentenced to 25 years in federal prison by a Manhattan court on Thursday. This comes after he was convicted of defrauding customers and investors, with Judge Lewis Kaplan highlighting the potential future risks posed by Bankman-Fried.

Technical Analysis

EURJPY Technical Analysis Report 28 March, 2024

EURJPY currency pair under the bearish pressure after the pair reversed down from the major resistance level 164.25, which also stopped the sharp weekly uptrend at the end of last year,

Digital Assets

BlockDAG’s Presale Hits $9.9M, MultiversX & MINA Price Predictions Show Green

Read about BlockDAG’s promising $10 prediction and insights on MultiversX Price Prediction as MINA’s potential unfolds.

Digital Assets

Rockstar Co-Founder and All-star Line Up Join Advisory Board to Take Metacade into Post Beta Orbit

Metacade, the revolutionary Web3 gaming platform, prepares to streak out of beta with a slew of ground-breaking initiatives that will redefine the way blockchain games are developed.

Retail FX

Prop firm The Funded Trader shuts down, claims relaunch in April

Prop trading firm The Funded Trader has ceased all operations, with claims for a relaunch in the near future.

Digital Assets

Ethereum-Based Tokenized Real Estate Platform USP Launches On Republic

How This Californian Startup Is Revolutionizing Real Estate Investment through Ethereum-Based Tokenization.

Digital Assets

Sui Spikes in Weekly DEX Volume, Joins Top 10 of All Blockchains

March DEX volume on Sui stands at over $2.88B – up more than 49% from February – with decentralized exchange Cetus and wholesale liquidity layer DeepBook leading.

Digital Assets

Prisma Finance suffers $10 million crypto exploit, attack ongoing

Liquid staking protocol Prisma Finance fell victim to a security exploit on March 28, resulting in nearly $10 million in Prisma mkUSD and wrapped stETH being stolen by hackers.

Digital Assets

Masa and LayerZero: Bridging Blockchains for Data Sovereignty

Masa Network is poised to revolutionize the personal data landscape with its upcoming launch as a cross-chain platform, making it accessible on a variety of blockchains right from the start.

<