The Autorité des marchés financiers (AMF) announced sanctions against IG Market Limited (a subsidiary of IG Group Holdings PLC, the parent company of the IG Group) which included a fine of EUR 500,000 on Monday.
The sanctions against IG are the result of an investigation which the AMF began on June 22, 2015, after it decided to review the company’s compliance with its professional obligations in its French branch.
The IG group is one of the biggest FX and stockbrokers in the world, and the AMF has identified that its French branch gave misleading information about investing in CFDs and binary options, did not clearly display the source of trade recommendations and trade ideas and portrayed unqualified employees as financial analysts.
IG’s breach of compliance
The report from the regulator accuses IG’s French branch with insufficient diligence when cooperating with the AMF in its investigation. It also states the company failed to ask clients for all the information necessary to verify their level of knowledge and investment experience.
The AMF also said IG circulated investment recommendations that didn’t clearly show the identity of the source of its recommendations.
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This is in reference to trade recommendations the company made on its YouTube channel, website and Twitter during the relevant period. Out of around 20 videos, only two showed viewers the source of the recommendations.
In the report, it states that IG argued that although some of the investment recommendations it issued did not include the signature of the external provider, they represented a small proportion of the total number of recommendations posted on its website.
The company added it remedied the breach as soon as the AMF investigation was completed and it has strengthened its internal control procedures.
In addition, in some of the videos, photos of employees from the broker were falsely labeled as “IG Analyst, Paris.” None of the employees involved held that position nor did they have the necessary qualifications to offer financial advice.
The report claims that IG admits to having “inadvertently” listed five of its employees from its French branch as “analyst” on its website incorrectly. The company states that this was a qualification used internally and it did not mean “financial analyst.” IG emphasizes it had no intention to mislead anyone.
The AMF also found IG’s CFD and binary options information was also misleading and incomplete.