The company’s sole director, Shlomo Yoshai, has also been fined $400,000 and disqualified from managing corporations for eight years.
In a statement on Wednesday, ASIC said Forex – which offered clients opportunities to trade in CFDs – “engaged in a system of unconscionable conduct” including offering incentives to clients to transfer more money to their Forex trading account even after being told they could not afford to invest more money, employing high-pressure sales tactics, recommending inappropriate trading strategies and making misleading or deceptive representations to clients.
The court also found that Forex failed to act in the best interests of its clients when providing personal advice and failed to complete the necessary requirements to ensure the services were provided honestly and fairly.
His honour Justice Middleton said the company had “systemic compliance deficiencies and a culture of non-compliance” and said that “the vast losses incurred by clients support the imposition of a significant pecuniary penalty”.
His honour also described Mr Yoshai’s behaviour as “incompetent and irresponsible”.
ASIC commissioner Cathie Armour added: “The significant penalty handed down by the Court reflects the seriousness of this conduct.
“If corporations disregard the law and their client obligations, ASIC will take action and the consequences can be severe.”
This will likely be a “vacant judgment” as the company and it’s director will ensure there are no company funds left AND the client funds held in trust must be returned to every client. Then the Bankruptcy Trustee will add their hefty fees and they always get paid first, even before a losing client does. ASIC, you have once again done an extraordinary job of demonstrating mass incompetence by catching the culprit AFTER THE FACT and after any salvagable funds have been sent to offshore bank accounts and in the Director’s relatives names living in India and Costa Rica many months before you came along! Stupid Bureacrats!!
Great to see ASIC have another court battle win for $20M, does that mean now that the Adviser Levy will be reduced next year with extra cash received, above government funding, as I assume last years annual Adviser Levy fees would have funded this court case??
We never see the calculations, we just get told, here’s you fee, wouldn’t it be prudent for ASIC to be transparent and provide simple P&L??
hahahaha good one…
“penalties and fines from ASIC enforcement are diverted to consolidated revenue, rather than to offset ASIC’s costs”
Open that wallet a little further thanks
It would be very imprudent of them as they probably won’t see a cent from the company or the principal if either or both declare bankruptcy. In other words, another big win paid by ASIC. Even if the fine or part of it would be paid, it wouldn’t reduce the adviser levy – the government gets it.
Happy days.