The Australian Securities and Investments Commission (ASIC) has released details of its recent ban of Forex Capital Trading director Shlomo Yoshai, and four others of the OTC derivative issuer’s employees. Bans from providing financial services range from three to ten years due to unlawful behaviour against standard regulation.
The dramatic growth of the Australian market for OTC retail derivatives has gone hand-in-hand with a significant rise in formal complaints made to ASIC concerning conduct within the market. ASIC had cancelled Forex CT’s Australian financial services licence back in May 2020 after finding that their financial services business model ignored crucial AFS licensee obligations, resulting in unacceptable, disingenuous and misleading practices.
ASIC began civil penalty proceedings in the Federal Court against Forex CT and Shlomo Yoshai on 16 July 2020, after discovering that the sole director’s lack of respect for compliance justified a ban for a significant period of time. Yoshai has now been given a ten- year ban after behaviour on Forex CT’s trading floor had been compared to scenes in The Wolf of Wall Street by former account managers.
Yoshai was found to have pushed employees and account managers to implement high-pressure tactics when dealing with clients, offer incentives to clients to encourage deposits being made and pressure them to delay or cancel withdrawal requests. All of these actions were found to be a clear breach of the Corporations Act.
Former team leaders Benjamin Esler and Jarrod Popuard have also been banned for four-and-a-half and six years, respectively while former account managers Huy Minh Hoang and Andrew Tran have been banned for five and three years. Like Yoshai, all of the aforementioned former employees were found to be involved in highly pressurised and unfair conduct.
Account managers were found to have made misleading claims and representations to clients, with ASIC discovering that Huy Minh Hoang had provided personal advice to clients while not having a genuine understanding of the nature of the CFD and FX products he was advising on. All five men have been labelled unfit to provide financial services in a professional environment.
Read More:
