ASIC finds out Vantage Global Prime employee misused client information for personal benefit
On 31 separate instances, a senior employee of Vantage Global Prime used the trading information of profitable clients to generate a profit for himself by trading in a similar way.
The Australian Securities & Investments Commission (ASIC) has earlier today announced that it accepted a court enforceable undertaking from Vantage Global Prime Pty Limited (Vantage), an Australian Financial Services licensee that is authorised to deal in financial products including CFDs to retail and wholesale clients.
Following an investigation, the regulator concluded that Vantage did not have in place adequate systems and controls to identify, monitor for, prevent and respond to inappropriate use of its confidential client trading information by its employees for their own personal benefit.
More specifically, during the period from October 2, 2015 to January 25, 2017 a senior employee of a wholly subsidiary of Vantage who had the responsibility of managing a team and was authorized to onboard new clients and manage relationships with existing ones, had access to confidential client trading information. The employee identified four clients with successful and profitable trading records and used their information to derive a personal benefit of $95,000.
In short, in about a minute after one of the profitable traders opened a position in DJIA CFD contracts, the employee would follow the client’s trading in his own personal trading account. He would then close his position when it was profitable.
ASIC is concerned that Vantage may not have complied with its obligations under the Corporations Act, including by failing to provide financial services in an efficient, honest and fair way, as well as by failing to manage adequately conflicts of interest.
In response to ASIC’s concerns, Vantage has agreed to appoint an independent expert to assess and evaluate the adequacy of and implementation of its systems and controls to deal with improper access to its client confidential information.
Vantage has also undertaken to:
- not appoint the senior employee as a director for a period of 12 months;
- arrange for all its representatives to complete compliance training;
- make a community benefit payment of $95,000 to The Ethics Centre;
- arrange for the employee in question to complete a course in business ethics.
