Discretionary CFD Broker Terminated by ASIC, Director Banned for Second Time
by
George Tchetvertakov
ASIC terminates one CFD broker, bans its Director and warns against a margin foreign-exchange broker YoutradeFX operating without a license. The regulator's battle for compliant market practises continues.
The Australian Securities and Investments Commission (ASIC) has announced the decision to terminate the financial services license belonging to Shore Capital Pty Ltd, trading under the name Coast Capital. The broker's main line of business is offering CFD trading services and trading on clients behalf in a discretionary capacity.
The company's owner, Mr. Scott Logan, was banned from providing financial services for seven years after the ASIC investigation found that he had breached numerous financial services laws as a director and sole employee of Shore Capital.
This is not the first time Mr. Logan has been sanctioned by the Australian financial regulator. Mr. Logan was formerly an authorized representative of Romad Financial Services Pty Ltd (Romad) from June 25, 2011 to October 21, 2011. Romad's AFS licence was cancelled by ASIC on October 21, 2011. Shore Capital's AFS licence was cancelled on October 16, 2014 and no longer operates a financial services business.
In addition, earlier this month Mr. Logan was disqualified from acting as an investment manager or custodian of a superannuation entirety by the Australian Tax Office (ATO). Via a disqualificaiton order, the Deputy Commissioner of Taxation, Alison Lendon, made the decision stating that Mr. Logan is "not a fit and proper person to be a trustee."
ASIC's Investigation
The investigation focused on the period between April 2011 and June 2013 when Shore Capital was alleged to have been trading in CFD contracts on behalf of retail clients when it was not authorized to do so. Shore Capital initially traded on behalf of retail clients without holding an Australian financial services (AFS) licence. It later traded on behalf of retail clients when it held an AFS licence for the provision of services to wholesale customers only.
On an individual level, ASIC accuses Mr. Logan of making "numerous false or misleading representations to Shore Capital clients," such as falsely claiming ASIC authorization and charging inappropriate fees. ASIC says that at least three clients lost a combined total of over $38,000 as part of trading activities carried out by Shore Capital.
ASIC Deputy Chairman, Peter Kell said, 'The investing public needs to be able to trust those who provide financial services. ASIC will act to ensure those who behave without regard to their Obligations to their clients will be removed from the financial services industry."
Mr. Logan and Shore Capital have a right of appeal to the Administrative Appeals Tribunal for a review of ASIC’s decisions.
ASIC Warns against YouTradeFX
In a separate case involving a different margin foreign Exchange broker, ASIC today cautioned Australian investors against dealing with the company or group, YoutradeFX.
ASIC advises that YoutradeFX is not regulated by ASIC, nor is it licensed to trade in margin FX in Australia, as has been revealed by several websites that review and comment upon FX trading.
The company previously known as Youtrade Capital Markets Australia Pty Ltd is now known as Golden Sky Australia Pty Ltd and holds an Australian financial services (AFS) licence. The company was previously associated with the YoutradeFX group, however, since July 2014 and following inquiries by ASIC, it has not been part of YoutradeFX, provided FX trading or contracts for difference (CFDs), or operated under the name Youtrade Capital Markets Australia Pty Ltd.
ASIC urges all investors considering trading in margin FX to check that they are dealing with a licensed entity, or authorized through an AFS holder and regulated by ASIC.
The Australian Securities and Investments Commission (ASIC) has announced the decision to terminate the financial services license belonging to Shore Capital Pty Ltd, trading under the name Coast Capital. The broker's main line of business is offering CFD trading services and trading on clients behalf in a discretionary capacity.
The company's owner, Mr. Scott Logan, was banned from providing financial services for seven years after the ASIC investigation found that he had breached numerous financial services laws as a director and sole employee of Shore Capital.
This is not the first time Mr. Logan has been sanctioned by the Australian financial regulator. Mr. Logan was formerly an authorized representative of Romad Financial Services Pty Ltd (Romad) from June 25, 2011 to October 21, 2011. Romad's AFS licence was cancelled by ASIC on October 21, 2011. Shore Capital's AFS licence was cancelled on October 16, 2014 and no longer operates a financial services business.
In addition, earlier this month Mr. Logan was disqualified from acting as an investment manager or custodian of a superannuation entirety by the Australian Tax Office (ATO). Via a disqualificaiton order, the Deputy Commissioner of Taxation, Alison Lendon, made the decision stating that Mr. Logan is "not a fit and proper person to be a trustee."
ASIC's Investigation
The investigation focused on the period between April 2011 and June 2013 when Shore Capital was alleged to have been trading in CFD contracts on behalf of retail clients when it was not authorized to do so. Shore Capital initially traded on behalf of retail clients without holding an Australian financial services (AFS) licence. It later traded on behalf of retail clients when it held an AFS licence for the provision of services to wholesale customers only.
On an individual level, ASIC accuses Mr. Logan of making "numerous false or misleading representations to Shore Capital clients," such as falsely claiming ASIC authorization and charging inappropriate fees. ASIC says that at least three clients lost a combined total of over $38,000 as part of trading activities carried out by Shore Capital.
ASIC Deputy Chairman, Peter Kell said, 'The investing public needs to be able to trust those who provide financial services. ASIC will act to ensure those who behave without regard to their Obligations to their clients will be removed from the financial services industry."
Mr. Logan and Shore Capital have a right of appeal to the Administrative Appeals Tribunal for a review of ASIC’s decisions.
ASIC Warns against YouTradeFX
In a separate case involving a different margin foreign Exchange broker, ASIC today cautioned Australian investors against dealing with the company or group, YoutradeFX.
ASIC advises that YoutradeFX is not regulated by ASIC, nor is it licensed to trade in margin FX in Australia, as has been revealed by several websites that review and comment upon FX trading.
The company previously known as Youtrade Capital Markets Australia Pty Ltd is now known as Golden Sky Australia Pty Ltd and holds an Australian financial services (AFS) licence. The company was previously associated with the YoutradeFX group, however, since July 2014 and following inquiries by ASIC, it has not been part of YoutradeFX, provided FX trading or contracts for difference (CFDs), or operated under the name Youtrade Capital Markets Australia Pty Ltd.
ASIC urges all investors considering trading in margin FX to check that they are dealing with a licensed entity, or authorized through an AFS holder and regulated by ASIC.
The Menace of Clones: Malta’s Regulator Warns against Fake "Documents and Emails"
Network, Learn, Grow | FMAS:24
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
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Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
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Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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