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Screenshot of a breaking news alert e-mail from Q2 2017
Israeli financial regulator ISA (Israel Securities Authority) has fined the ATrade subsidiary (atrade.co.il) of global retail forex broker AvaTrade NIS 150,000 (USD 42,000), due to a misleading video the company was circulating as part of a recent promotional campaign.
ATrade is one of six retail FX brokers which have received the relatively new ISA license, under Israel’s relatively new Forex Law. And, the fact that all is still fairly new in Israeli forex regulation seems to have saved ATrade from a much larger fine.
According to the ISA, the published video was likely to mislead potential customers to think that the license granted to ATrade by the ISA gives clients protection of their money from drops in the capital market, or ensures the quality of investment. An ISA license, of course, does not provide any such protection.
The video featured a person falling, and then the ISA was mentioned as the reason why, after receiving the license, one can invest in the arena with confidence. The visual and verbal context of the video might mislead customers about the role of the regulator, and could give clients the false message that after receiving the license they are protected from falls and losses involved in investing in the arena. The connection, made in the video, between the license granted by the ISA, and the alleged security against “falling” (investment loss) is at the core of the deception.
After hearing the company’s arguments, the ISA decided that the company violated the provisions of the law with the publication of the video and imposed a total monetary sanction of NIS 150,000.
This amount is after a 75% reduction in the financial sanction due to various mitigating circumstances, especially in light of the fact that this is a new arrangement and that ATrade received its license from the ISA only a few weeks before the breach.
The ISA’s full statement on the matter can be seen here (in Hebrew only).