The Australian Securities & Investments Commission (ASIC) announced on Monday that it has imposed sanctions against Vantage Global Prime Pty Limited (the parent company of Vantage FX). The sanctions follow a court ruling which said that between October 2, 2015, to January 25, 2017, a senior employee at Vantage misused client trading data to their benefit.
According to a statement from ASIC, during its investigation into the Australian licensed broker, Vantage, the watchdog found the company had no systems or controls in place to monitor the personal trading of its employees. The company did not prevent or identify the conduct by the employee until it became aware of ASIC’s investigation and there were no systems and controls in place to ensure its representatives are adequately trained to provide Financial Services.
As a result, Vantage will appoint an independent expert to assess its systems and controls to deal with improper use of its clients confidential trading information. The company will not appoint the senior employee as a director for one year. It will also have all of its representatives complete compliance training and make a community benefit payment of $95,000 to The Ethics Centre.
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Misuse of client’s information
The senior employee had the responsibility of managing a team, onboarding new clients and managing relationships of existing clients. According to the court ruling, he was authorized by Vantage to access its systems to view confidential client trading data. During the period, the senior employee identified four clients who had a record of successful and profitable trading.
The employee would wait for one of the four clients to open a position with Vantage in Dow Jones Industrial Average (DJIA) CFD contracts. Within about a minute of a client taking a position, the employee would take the same position in his trading account with another CFD provider in comparative DJIA CFD contracts.
Once the contracts were in a profitable position, the employee would generally close off his position. He did this on 31 separate occasions and made about $95,000.
ASIC’s investigation found that Vantage did not obtain any benefit from its senior employee’s trading, nor did it find evidence that any of the clients suffered loss from the use of their confidential trading information.