The Australian Securities and Investments Commission (ASIC) has banned a Queensland-man Mark Jennings for ten years from providing financial services and controlling any financial services business entity.
Announced on Tuesday, Jennings was found to have falsely advertised that he could provide guaranteed returns from contracts for differences (CFDs) trading and providing services without any necessary license.
Jennings is a former Director at Suncoast Trading Pty Ltd (operated as Equity Trade), a trading company now under liquidation. The company collapsed as it suffered significant losses while trading with client monies.
The Aussie regulator detailed that Jennings, when advertising for Equity Trade, offered high guaranteed returns for his clients. He claimed he could make “50%, 100% or 200% per year GUARANTEED RETURNS.” Furthermore, the Equity Trade website claimed the company’s investments to be “recession-proof” as it takes profit from “both rising and falling markets.” And, all of these services were offered without any appropriate license.
ASIC detailed that Jennings carried out his investment business without holding any Australia Financial Service (AFS) license, which is mandatory for such operations. There were also some traces of misappropriation of funds as he made some clients deposit their funds into his personal trading account and traded CFDs without consulting them.
Moreover, he was blamed for making false and misleading claims of guaranteed returns. Indeed CFDs trading allows traders to profit from both rising and falling markets. However, these instruments are extremely risky, and most retail traders lose their investments while trading CFDs. The UK and European regulators even mandate retail brokers to disclose the percentage of their clients who are losing monies.
Furthermore, Jennings even provided false or misleading information to the regulator on the number of Equity Trade clients and the extent of their losses. In addition, the regulator found that he is not adequately trained or competent enough to offer financial services and “is likely to contravene a financial services law.”
ASIC’s Crackdowns
Australia is considered one of the matured CFDs markets. Several well-known retail brokers are headquartered in the country, while many international ones are expanding there. Meanwhile, ASIC remains strict with its regulations around the industry and imposes heavy limits on leverage and marketing tactics until May 2027.
Earlier this month, ASIC banned a former manager of CFDs broker Trade360 for eight years, blaming him for not being “adequately trained and competent.” Meanwhile, the regulator obtained a court order earlier this year against another trader, sending him to prison for nine months for trading CFDs with insider information.
