Forex CT Customers Lost at Least $54 Million, Yet to Be Compensated

The liquidators of the now-collapsed Aussie broker, Forex Capital Trading (Forex CT) released a report last week revealing that they have identified at least 11,174 former customers of the platform. Additionally, the losses on the platform have mounted to at least AU$77.4 million ($54.21 million), which is only likely to increase.

Forex CT provided forex and contracts for differences (CFDs) trading services until June 2020. Based in Melbourne, the platform operated with a license from the Australian Securities and Investments Commission, but severely violated regulations with its boiler-room sales tactics.

The three individual liquidators from FTI Consulting highlighted that the brokerage operated with “significant levels of misleading or deceptive conduct and unconscionable conduct.”

The brokerage targeted unsophisticated investors with aggressive sales tactics and operated aggressive marketing campaigns from jurisdictions with almost no financial market oversight to avoid any implications in Australia.

In addition, the latest liquidators’ report revealed that only 10.5 percent of the identified Forex CT customers made profits on the platform.

“I strongly urge former Forex customers to register for a potential claim against the Company, in order to allow the Liquidators to request those claims be paid by Forex CT’s parent, Invesus Group Ltd in Gibraltar,” said FTI’s Senior Managing Director, Daniel Woodhouse.

Regulator's Action in Vane?

The illicit practices of the trading platform came to the Aussie financial market supervisor’s notice around 2019, while ASIC cancelled the operating license of the platform in June 2020. Moreover, the regulator took action and received a court’s approval to impose an AU$20 million pecuniary penalty on the broker.

Furthermore, the regulator banned Forex CT’s sole director, Shlomo Yoshai, for ten years from offering financial services and imposed an additional fine of AU$400,000 on him. However, Yoshai cooperated with the regulator that trimmed the initially sought penalty of AU$70 million to AU$20.4 million.

However, none of the proceeds from the penalty has reached the affected clients’ pockets yet.

The three individual liquidators from FTI Consulting highlighted that the brokerage operated with “significant levels of misleading or deceptive conduct and unconscionable conduct.”

In addition, the latest liquidators’ report revealed that only 10.5 percent of the identified Forex CT customers made profits on the platform.