CySEC Slaps FXFINPRO CEO with €350K Fine, 10-Year Ban

The Cypriot watchdog has hit executives of PFX Financial Professional with regulatory bans and fiscal penalties for violations of the local Investment Services and Activities and Regulated Markets Law.

In relation to the fine, CySEC CySEC The Cyprus Securities and Exchange Commission (CySEC) is a financial regulatory authority of Cyprus. CySEC is one of the key watchdog authorities for brokerages in Europe, whose financial regulations and operations comply with the European MiFID financial harmonization law.Founded in 2001, CySEC is instrumental in providing licensing and registration for forex brokers and previously binary options providers.CySEC is responsible for a variety of different functions, which includes the supervision The Cyprus Securities and Exchange Commission (CySEC) is a financial regulatory authority of Cyprus. CySEC is one of the key watchdog authorities for brokerages in Europe, whose financial regulations and operations comply with the European MiFID financial harmonization law.Founded in 2001, CySEC is instrumental in providing licensing and registration for forex brokers and previously binary options providers.CySEC is responsible for a variety of different functions, which includes the supervision Read this Term stated that PFX Financial Professional Ltd, which operates the brand FXFINPRO Capital, breached its conduct of business Obligations Obligations In finance, an obligation is a financial responsibility where the terms of a contract must be met. Should an obligation between parties fail then the party who is at default may face legal action. In this scenario, the guilty party will not only have to agree to pay the set amount to fulfill the contractual arrangement but may also be responsible for covering all legal proceedings cost. Routine payments or outstanding debt of any kind are considered financial obligations, so if someone owes you In finance, an obligation is a financial responsibility where the terms of a contract must be met. Should an obligation between parties fail then the party who is at default may face legal action. In this scenario, the guilty party will not only have to agree to pay the set amount to fulfill the contractual arrangement but may also be responsible for covering all legal proceedings cost. Routine payments or outstanding debt of any kind are considered financial obligations, so if someone owes you Read this Term when providing investment services to clients. It has also failed to submit financial accounts and other information required by CySEC in a complete and accurate manner.

The watchdog blamed the company’s CEO, Evgenios Martinides, and executive director Yaroslav Martynenko over their omission and negligence during their time in office. FXFINPRO CEO was ordered to pay €350,000 in fines and was also banned from acting in a management capacity relating to the financial sector for ten years.

“This decision is based on the findings of CySEC’s investigation into the Company’s activities and has taken into account among other factors the seriousness attributed to such infringements. CySEC is committed to enforcing the highest standards of governance for regulated companies in Cyprus,” the statement reads.

Earlier this year, the CySEC announced the initiation of the process of compensating the clients of PFX Financial Professional Ltd. The process involved the CySEC inviting clients to the claims portal for them to enter the necessary details and state their claims.

The Cypriot watchdog has wholly withdrawn the Cyprus Investment Firm (CIF) of FXFINPRO, and the company was forced out of business back in October 2018. FXFINPRO, which held registration number 193/13, had its license lapsed after CySEC raised concerns over practices by the company and its executives that the watchdog deemed potentially not compliant with its regulatory obligations.

What’s next?

In particular, the broker was initially flagged for non-compliance with section 28(1) of the Law which concerns persons who effectively lead its business, as well as an alleged violation of section 36(1) of the Law (Conduct of business obligations when providing investment services to clients). Further, FXFINPRO didn’t comply with section 114 with regards to submitting its financial accounts, as well as section 139(1), which requires regulated firms to provide the CySEC with correct, complete, and accurate information.

The company, however, is not expected to pay back its obligations in the near future, “for reasons directly related to its financial circumstances.”

Fortunately, FXFINPRO is a member of the Investor Compensation Fund (ICF), which serves to protect the claims of covered clients and provide them with compensation in case a member couldn’t meet its financial obligations.

The amount of the compensation payable to each client is calculated in accordance with the contractual terms governing his relationship with the faltering broker, but in general, the maximum amount doesn’t exceed €20.000.