New Zealand’s Financial Markets Authority (FMA) has today issued an order requiring that foreign exchange educator Cambrian Corporation Limited (Cambrian) revise certain of its marketing materials – including its website -which the agency said contained misleading or deceptive content, according to an FMA announcement.
Cambrian breached two provisions of the Financial Markets Conduct (FMC) Act, according to the FMA, in connection with its training and advices services relating to intra-day foreign exchange (Forex) trading, as per the Direction Order (Order) dated May 20, 2016.
The regulator cited that the statements Cambrian had made about its services in the materials were unsubstantiated or lacked basis to support the claims made and thus were considered misleading thus prompting the FMA order.
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Clients must be informed
The order requires that Cambrian provide a copy of the order to all of its past and present clients, and after making the required changes to its materials, and the company will need to certify its compliance with the FMC Act to the FMA.
Commenting regarding the order, FMA’s Liam Mason, Director of Regulation said, “From the clients we interviewed and trades we analysed, the FMA did not find any evidence that Cambrian’s strategy resulted in the claimed returns.
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Mr. Mason added: “Clients who signed up to Cambrian’s services will also have the opportunity to consider whether they did so on the basis of misleading information and seek recovery of any losses on that basis.”
FMA agreed to give Cambrian five days to informe all its clients and make the required revisions. The order noted regarding the use of testimonials, and certain required disclaimers and the need to emphasize inherent trading risks to counter-balance headline claims. Finance Magnates reporters reached out to Cambrian via email around
Cambrian’s MD comments
Finance Magnates reporters reached out to Cambrian via email around time of publication for comments, and received the following statement shortly afterwards from Cambrian’s Managing Director Jade Lynn:
“Naturally I am disappointed by the decision and although I do not agree with all of their findings, in particular, their analysis of Cambrian’s trades and trading journal as well as the disregard of analyzing further months of trading as supplied to the FMA, I am happy to comply and meet the requirements and view of the FMA in how Cambrian presents its marketing materials to the public.
The analysis of Cambrians trades were performed by the FMA with Bloomberg – a different data source to the data source used by Cambrian and its clients – and one must take into consideration that each trading platform has subtle variances due to the brokers spread and the data pricing. For this reason, the platforms used by Cambrian and its clients lead to materially different results to the FMA’s findings and screenshots of actual trading charts were presented to reveal this factually incorrect data. I was informed that this was not enough evidence to suggest their analysis is flawed.
Nonetheless, I am happy to comply and alter Cambrian’s marketing materials to fall inline with the FMA’s view of the forex markets. I have expressed complete willingness and have complied with all aspects of the investigation process thus far and will continue to ensure Cambrian’s materials meet the regulations and requirements of the FMA.”