Invast Financial Services Fined by ASIC for Providing Misleading Information to Clients

A Sydney-based broker is fined $20,400 for two infringements relating to marketing services to clients. The penalty indicates ASIC is

invast

Invast Financial Services Pty Ltd (Invast) has been penalized and fined by the Australian Securities and Investments Commission (ASIC) for providing misleading information on its website and via emails sent directly to clients and sales leads.

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Invast was issued with two separate infringement notices in July and the company has since paid the $10,200 charged for each infringement.

In a press release published today, ASIC asserts that in May 2014, representations on the Invast website contained a link that invited investors to undertake “risk-free trading” of contracts for difference (CFDs) for foreign exchange. ASIC considered the representation as misleading because “a reasonable investor may be misled into believing that the platforms promoted in the demonstration involved risk-free trading, rather than understanding that the demonstration account was risk-free,” according to ASIC.

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In addition, ASIC was concerned that an email to prospective clients, containing a statement claiming investors could access ‘low risk, high reward trading opportunities’ by viewing Invast’s video tutorial and e-book, was inconsistent with disclaimers sent and published elsewhere.

In general, ASIC believes that both the email to prospective clients and statements on the website misled consumers about the inherent risks of trading foreign exchange and derivatives.

Accompanying ASIC’s statement, Deputy Chairman Peter Kell said, “Trading in CFDs and other derivatives, by their nature, involve risks. It is important that consumers are aware of these risks and can make fully informed decisions when considering a particular investment strategy,” Adding, “AFS licensees should ensure the content of their promotional material does not contain any false or misleading statements that misstate or underplay these risks and create unrealistic expectations for consumers.”

Since the infringement notices were sent out, Invast has adjusted its website and claims that all marketing materials are now fully compliant with all ASIC regulations and guidelines.

ASIC’s monitoring of the retail FX industry continues and underlines the growing vigilance with which the regulator is monitoring the industry.

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