An Australian court has ordered USGFX, EuropeFX and TradeFred, three now-collapsed contracts for differences (CFD) brokers, to pay a combined total penalty of AU$300.2 million for their “systemic unconscionable conduct” between 2018 and 2020. It is a “record penalty” secured by ASIC in a regulatory matter.
Heavy Penalties on Now-Collapsed CFD Brokers
Union Standard’s Australian entity was slapped with the highest penalty of AU$156.7 million, while EuropeFX and TradeFred have to pay AU$114.1 million and AU$29.4 million, respectively.
The court orders, however, have been temporarily stayed until 13 July 2026.
EuropeFX and TradeFred were former authorised representatives of Union Standard, which operated under the name USGFX.
Related: EuropeFX's Sole Director Banned in Australia for 5 Years
The Australian unit of Union Standard primarily offered CFDs to Chinese customers. The civil penalty against it was also the first for failing to ensure its financial services were provided ‘efficiently, honestly and fairly’.
“Union Standard, EuropeFX and TradeFred operated business models that deliberately targeted inexperienced and vulnerable people using aggressive sales tactics to pressure them to trade in highly risky CFD products,” said ASIC Chair Sarah Court.
In addition to the penalty, the court also ordered an adverse publicity order against EuropeFX and a permanent restraint order preventing it from offering financial services. The platform must also return its customers’ deposits.
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Clients Lose Money, While Brokers Make It
The axe fell on Union Standard in mid-2020 when it entered voluntary administration, followed by the cancellation of its Australian licence and an investigation by the regulator. The UK-regulated unit of the broker also lost its licence a couple of years later.
According to ASIC data, 68 per cent of retail CFD traders in Australia lost money in the 2024 fiscal year, totalling more than AU$458 million, including AU$73 million in fees.
The regulator also highlighted that EuropeFX and TradeFred profited from their customers' losses in 95 per cent to 99 per cent of cases.
“Entities that profit from their clients’ losses will face serious consequences,” ASIC’s Court continued.
