Federal Court Sides with ASIC, Rules Against AGM Markets
- The Court found that AGM engaged in unconscionable conduct when providing OTC derivative products.
The Federal Court of Australia has delivered its judgment against AGM Markets Pty Ltd, OT Markets Pty Ltd, and Ozifin Tech Pty Ltd this week, ruling that the companies engaged in systemic unconscionable conduct while providing over-the-counter (OTC) derivative products to retail investors in Australia.
The three companies are currently in a court battle with the Australian Securities and Investments Commission (ASIC ASIC The Australian Securities and Investments Commission (ASIC) is the prime regulator in Australia for corporate, markets, financial services, and consumer credit. It is empowered under the financial service laws to facilitate, regulate, and enforce Australian financial laws. The Australian Commission was set up and is administered under the Australian Securities and Investment Commission Act of 2001. ASIC was initially the Australian Securities Commission based on the 1989 ASC Act. Initially, the The Australian Securities and Investments Commission (ASIC) is the prime regulator in Australia for corporate, markets, financial services, and consumer credit. It is empowered under the financial service laws to facilitate, regulate, and enforce Australian financial laws. The Australian Commission was set up and is administered under the Australian Securities and Investment Commission Act of 2001. ASIC was initially the Australian Securities Commission based on the 1989 ASC Act. Initially, the Read this Term), who started investigating the companies after it received a large number of complaints from retail investors.
The Court found on Wednesday that investors within Australia had lost more than $30 million as a result of the unconscionable conduct. The Honourable Justice Beach, who ruled on the case, found that AGM Markets, a global online forex broker, violated its Australian financial services (AFS) licensee 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 under s912A(1) of the Corporations Act to provide financial services “efficiently, honestly and fairly.”
The three companies, when dealing with retail investors in Australia, used account managers that were often located offshore. The court found that these account managers breached a number of rules.
Namely, the Court found that the account managers:
- Provided personal advice to clients when the companies were not licensed to do so;
- Provided advice that was not in the best interests of the companies’ clients; and
- Made representations that were false, misleading, or deceptive, including representations with respect to the risks of investing in derivative products, the risks to which funds deposited by clients into their trading accounts would be exposed to, and the profits that clients were likely to generate from their trading.
- After assessing the actions of the account managers, the Court also found that the companies engaged in misleading and deceptive conduct provided unlicensed personal advice, and advice which was not in the best interests of their clients.
ASIC canceled AFS license of AGM Markets in 2018
As Finance Magnates reported, ASIC canceled the AFS license of AGM back in 2018. At the time, the regulator said that the license was cancelled due to “unconscionable conduct and unmanaged conflicts of interest.”
At this point, on the ruling from the Court has been given. A further hearing on penalty and relief is yet to be had, with the date still yet to be determined.
The Federal Court of Australia has delivered its judgment against AGM Markets Pty Ltd, OT Markets Pty Ltd, and Ozifin Tech Pty Ltd this week, ruling that the companies engaged in systemic unconscionable conduct while providing over-the-counter (OTC) derivative products to retail investors in Australia.
The three companies are currently in a court battle with the Australian Securities and Investments Commission (ASIC ASIC The Australian Securities and Investments Commission (ASIC) is the prime regulator in Australia for corporate, markets, financial services, and consumer credit. It is empowered under the financial service laws to facilitate, regulate, and enforce Australian financial laws. The Australian Commission was set up and is administered under the Australian Securities and Investment Commission Act of 2001. ASIC was initially the Australian Securities Commission based on the 1989 ASC Act. Initially, the The Australian Securities and Investments Commission (ASIC) is the prime regulator in Australia for corporate, markets, financial services, and consumer credit. It is empowered under the financial service laws to facilitate, regulate, and enforce Australian financial laws. The Australian Commission was set up and is administered under the Australian Securities and Investment Commission Act of 2001. ASIC was initially the Australian Securities Commission based on the 1989 ASC Act. Initially, the Read this Term), who started investigating the companies after it received a large number of complaints from retail investors.
The Court found on Wednesday that investors within Australia had lost more than $30 million as a result of the unconscionable conduct. The Honourable Justice Beach, who ruled on the case, found that AGM Markets, a global online forex broker, violated its Australian financial services (AFS) licensee 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 under s912A(1) of the Corporations Act to provide financial services “efficiently, honestly and fairly.”
The three companies, when dealing with retail investors in Australia, used account managers that were often located offshore. The court found that these account managers breached a number of rules.
Namely, the Court found that the account managers:
- Provided personal advice to clients when the companies were not licensed to do so;
- Provided advice that was not in the best interests of the companies’ clients; and
- Made representations that were false, misleading, or deceptive, including representations with respect to the risks of investing in derivative products, the risks to which funds deposited by clients into their trading accounts would be exposed to, and the profits that clients were likely to generate from their trading.
- After assessing the actions of the account managers, the Court also found that the companies engaged in misleading and deceptive conduct provided unlicensed personal advice, and advice which was not in the best interests of their clients.
ASIC canceled AFS license of AGM Markets in 2018
As Finance Magnates reported, ASIC canceled the AFS license of AGM back in 2018. At the time, the regulator said that the license was cancelled due to “unconscionable conduct and unmanaged conflicts of interest.”
At this point, on the ruling from the Court has been given. A further hearing on penalty and relief is yet to be had, with the date still yet to be determined.