The regulator is seeking support from government to extent its product intervention powers on contracts for difference (CFDs) until they are revoked or sunset in 2031.
Gillham said, while these products were marketed as being ‘commission-free’, clients had two major misunderstandings of how the system worked.
“What most retail clients fail to understand is that when they trade with a broker who is a market maker, they decide on the spread between the bid and ask price. Typically, this spread is much larger than a broker who mirrors the underlying asset. What this means is that the profits you could make amount to a lot less and your losses are much larger when trading with a market maker,” he said.
“Another fact that retail clients fail to understand about these products is that the money deposited into client trading accounts often becomes part of the broker’s revenue due to the client’s lack of knowledge and experience when trading these markets.
The Australian Securities and Investments Commission cancelled its Australian financial services licence (AFSL) after an investigation.
ASIC found Yoshai was involved in Forex CT’s trading floor culture, an environment that had been likened by former account managers to ‘The Wolf of Wall Street’, where a bell or a gong was rung when clients deposited funds of certain amounts into their trading accounts and account managers could participate in incentive ‘games’ such as ‘wheel of fortune’, roulette tables and dice games to win cash if certain client deposit targets were met.
The Court found Forex CT engaged in a system of unconscionable conduct by:
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ASIC bans Forex Capital Trading director Shlomo Yoshai for 10 years after reports of Wolf of Wall Street culture
updated 4
MarMarch 2021 at 11:29am
Former account managers likened ForexCT s trading floor culture to the Leonardo Dicaprio film The Wolf of Wall Street.
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The Australian Securities and Investments Commission has handed lengthy bans to the director and former employees of an online foreign currency trader, whose culture insiders likened to something out of The Wolf of Wall Street.