ASIC bans Mark Jennings for unlicensed CFD trading with “guaranteed returns”

Rick Steves

The Australian Securities and Investments Commission has banned Queensland-based CFD trader Mark Jennings from providing financial services and carrying on a financial services business for 10 years.

According to ASIC, he advertised guaranteed investment returns and traded Contracts for Difference (CFDs) using client funds when he was not licensed.

Mark Jennings was the director of Suncoast Trading Pty Ltd, which is now in liquidation after suffering significant losses trading client monies.

“50%, 100% or 200% per year GUARANTEED RETURNS”

The CFD trader advertised under the name Equity Trade that he could make ‘50%, 100% or 200% per year GUARANTEED RETURNS*’, while also stating that ‘[o]ur investments are recession proof, we profit in both rising and falling markets’.

Suncoast Trading, Equity Trade, and Mr. Jennings did not hold the necessary Australian Financial Services license or authorization to provide financial services.

ASIC has decided to ban Mark Jennings after finding that he:

  • carried on a financial services business without holding an AFS license;
  • had some clients deposit their funds into his personal trading account and traded CFDs without consulting them;
  • made false or misleading statements as the returns were not guaranteed and there was no genuine basis to make the statement that the trades would be profitable in both rising and falling markets;
  • gave false or misleading information to ASIC about the number of Equity Trade’s clients and the extent of losses suffered;
  • is not adequately trained or competent to provide financial services; and
  • is likely to contravene a financial services law.

Mark Jennings is banned from providing any financial service, controlling an entity that carries on a financial services business, and performing any function involved in carrying on a financial services business.

Even if this CFD trader held an AFS license, he wouldn’t be allowed to make such statements, especially to retail consumers. Last year, ASIC implemented restrictions on the leverage and marketing of CFD products for retail clients.

The regulator imposed restrictions on CFDs issued to retail clients, including:

  • leverage ratio limits ranging from 30:1 to 2:1
  • standardization of margin-close out rules
  • negative balance protection
  • prohibitions on offering or giving of certain inducements

ASIC also beefed up enforcement action to address misconduct, surveillance projects and public warnings, and promoted retail client education campaigns and guidance for CFD issuers.

One year later, the Australian regulator decided to renew the order for five more years after noting that during the order’s first six months of operation:

a 91% reduction in aggregate net losses by retail client accounts (from $372 million to $33 million aggregate net loss per quarter on average)
51% fewer loss-making retail client accounts per quarter on average
an 87% decrease in margin close-outs affecting retail client accounts per quarter on average
an 88% reduction in negative balance occurrences for retail clients per quarter on average.

Read this next

Retail FX

Lion launches multi-currency trading accounts powered by AI

The core advantages of multi-currency trading account services include enabling significant cost savings and higher efficiency for investors.

Inside View, Interviews

Interview: Stanislav Bunimovich on Finalto’s white label solution

To explore what makes Finalto’s white-label solutions stand out in such an incredibly competitive market, Finalto sat down with its Chief Operating Officer, Stanislav Bunimovich, for an interview. 

Digital Assets

Talos acquired Cloudwall for a better portfolio management system

Cloudwall’s additional expertise in portfolio risk systems further positions Talos at the forefront of portfolio management systems across spot, futures, perps, and options.

Digital Assets

Bybit’s Bitcoin market share explodes, up by 400%

“This milestone is a testament to our sharp trading products and the loyalty of our users. As the industry evolves, Bybit remains at the forefront, ready to set new standards in the crypto trading world.”

Crypto Insider

Why Self-Custody is the Key to Secure Crypto Trading

Crypto trading is fast gaining popularity; as of writing, the total market capitalization stands at $2.3 trillion, double what it was at the onset of the 2021 bull market.

Industry News

UK FCA sues Lee Steven Maggs for FX scam Kube Trading

‘Kube Trading’ allegedly received around £2.67 million for FX trading and concealed significant losses from investors.

Market News

AUD/USD Soars Following Inflation Report

Australia’s CPI surge hints at prolonged tight monetary policy. Watch the Aussie dollar as US economic data looms.

Institutional FX

GCEX reports drop in turnover in 2023 due to crypto winter

“The crypto winter had a huge impact across the industry, and GCEX was no exception. However, in response to the decline in revenue, we have been resilient and adaptive, navigating our costs effectively and diversifying revenue streams such as introducing staking services for institutional and professional clients.”

Institutional FX

FxGrow taps Integral’s SaaS brokerage workflow

“FxGrow’s decision to partner with us is indicative of the growing advantage for brokers to leverage tier-one institutional-grade technology while maintaining control over their own platform. Integral is well-positioned to provide the SaaS solutions that will enable these businesses to better compete in the market.”

<