Forex Capital Trading sued for unconscionable conduct and conflicted remuneration

The Australian Securities and Investments Commission announced it initiated civil penalty proceedings in court against Forex Capital Trading Pty Ltd (Forex CT) and its director, Shlomo Yoshai.

The Australian watchdog alleges that Forex CT used high pressure sales tactics like offering incentives (credits and rebates) to encourage clients to transfer more money to Forex CT and recommended inappropriate trading strategies to clients. Moreover, the company made false or misleading statements to its clients.

ASIC claims that Forex CT implemented and encouraged a trading floor culture that was directed towards maximising trading volume and client deposits rather than compliance. It established and implemented incentives for clients to deposit funds and disincentives for clients to withdraw funds from their trading accounts and failed to ensure compliance with the financial law.

This kind of conduct has a maximum civil penalty of $420,000 for an individual and $2,100,000 for a body corporate.


The Australian regulator also alleges that Forex CT contravened a ban on conflicted remuneration under the Corporations Act by paying account manager bonuses primarily based on client “net deposits” (total client deposits less withdrawals) and failed to act in the best interests of clients.

This may add a maximum civil penalty of $1,000,000 for the company.

Earlier in June, ASIC banned Forex CT account manager Steven Marsh from providing financial services for three years. Steven Marsh served as an account manager at Forex CT between February 2018 and March 2019. In this period, Marsh traded CFDs and FX Contracts. The Australian watchdog found that Marsh did not comply with the financial services law and was not adequately trained to provide financial services.

In May ASIC cancelled Forex CT’s Australian financial services (AFS) licence after finding that the company’s business model was disregarding their licence obligations. Moreover, it resulted in misleading conduct.

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