The Federal Court of Australia has reached a verdict in the Australian Securities and Investments Commission v One Tech Media Ltd case, with the Judge ruling in the regulator’s favor.
OTML breached the Corporations Act
Justice Davies of the Federal Court, who reached their judgment on the 5th of February, 2020, found that One Tech Media Limited (OTML), Allianz Metro Pty Ltd, Eustace Senese, and Yoav Ida breached the Corporations Act in relation to the pressure sale of binary options to Australian consumers.
According to a statement released by ASIC this Friday, the regulator took OTML to Court, because the company, based in Seychelles and later in the Marshall Islands, offered binary options trading to customers in Australia without holding an Australian Financial Services Licence (AFSL). They did so through the following websites, www.titantrade.com and https://tradettn.com.
Furthermore, the Aussie watchdog also found that OTML issued binary options without providing the necessary product disclosure statements. In the ruling, Her Honour found that OTM engaged in “unconscionable conduct” in relation to a financial product.
“…and I further find, that the false and misleading representations were likely to induce, and did induce, persons within Australia to apply for the trading in, or to acquire, binary options through the website and that, when making the representations, One Tech and the One Tech brokers/representatives knew them to be false in a material particular. I find therefore that One Tech committed multiple contraventions of s 1041E(1),” the court ruling seen by Finance Magnates said.
What Does 2021 Hold for the Markets? HYCM CEO SpeaksGo to article >>
As part of the case, Australian company Allianz Metro Pty Ltd, alongside Eustace Senese and Yoav Ida, were also found to have breached the Corporations Act. This was because they provided paying agency services to the financial services business conducted by OTML. However, Allianz Metro Pty Ltd was found not to have provided a custodial or depository service.
ASIC Commission: our litigation has provided clarity
Commenting on the case, ASIC Commissioner Danielle Press said in the statement: “This judgment provides much needed clarification as to what constitutes “arranging” in the context of someone arranging for another person to deal in a financial product.”
“ASIC’s litigation has provided clarity to otherwise grey areas of the law. This is ultimately to the benefit of both ASIC, industry and most importantly, consumers.”
In its statement published today, ASIC outlined its next steps. Namely, the regulator orders that OTML pays civil penalties in relation to the Court’s declaration made and will seek disqualification orders against the Eustace Senese and Yoav Ida.
A date for the hearing on penalty will be chosen by the Court.