The Australian Securities and Investments Commission (ASIC) has taken steps against a former director of an already bankrupt broker. Mr. Andrew Jeffers, an accountant from Sydney, has been banned from providing any financial services until May 2018.
Mr. Jeffers was banned after ASIC found that GTL Trade Up Pty Ltd, a company of which Mr Jeffers was a director, issued three product disclosure statements between March 2012 and March 2013, including statements which were materially false or misleading.
GTL was issued with an Australian financial services licence in January 2011 to carry on a financial services business to deal in and advise on a range of financial products, including derivatives and FX. The main liquidity provider of GTL was Dubai-based GTL Trading DMCC.
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Liquidators were appointed to GTL in September 2013 after DMCC failed to make funds available to GTL to meet client withdrawals. At the time, GTL was owed about $4.35 million by DMCC. GTL owed about $4.4 million to its retail clients.
While Mr. Jeffers was a director, GTL issued the three product disclosure statements which included statements that ASIC found to be false or materially misleading in that they did not represent the true trading position undertaken by GTL.
These Statements Were:
- GTL Tradeup executes a back to back transaction for each client transaction with our parent entity GTL Trading DMCC;
- GTL Tradeup’s business is based on flow, spread/commission and leverage financing margin. GTL Tradeup does not take the other side of a client’s position with the intent to benefit from a client loss;
- GTL Tradeup does not take proprietary positions based on an expectation of market movements;
- GTL Trading DMCC and GTL Trading only conduct hedging with counterparties that are considered by Standard & Poors to be of an A+ or higher credit rating;
- Steps taken on a daily basis to ensure GTL Tradeup’s financial requirements are maintained include, but are not limited to, transferring money owed to clients to segregated client accounts if needed.
Mr. Jeffers has made an application appealing to the Administrative Appeals Tribunal for a review of ASIC’s decision.