The Financial Markets Authority (FMA) of New Zealand today has ordered a foreign exchange educator to change its marketing materials on the basis that they were misleading or deceptive, and it had made unsubstantiated statements about its services.
Cambrian Corporation Limited (Cambrian) offers training and advice services relating to intra-day foreign exchange trading. In the FMA’s view, Cambrian breached two provisions of the Financial Markets Conduct Act (FMC Act), and so the FMA has issued a Direction Order (Order).
The Order requires Cambrian to, among other things, change its marketing materials – including its website – to ensure they become and remain compliant with the FMC Act; and certify their compliance to the FMA. Cambrian must also provide a copy of the Order to all of its clients, past and present.
Direction orders are a regulatory tool introduced under the FMC Act and can be used where the FMA is satisfied that a person’s or company’s conduct has breached, or is likely to breach, certain provisions of the FMC Act, including Part 2 fair dealing provisions.
Liam Mason, FMA Director of Regulation said, “From the clients we interviewed and trades we analysed, the FMA did not find any evidence that Cambrian’s strategy resulted in the claimed returns.
The Direction Order was a proportionate response necessary to ensure that investors who wish to engage with Cambrian have access to information that is correct and not misleading in any way.
Clients who signed up to Cambrian’s services will also have the opportunity to consider whether they did so on the basis of misleading information and seek recovery of any losses on that basis,” Mr Mason said.
The FMA has agreed to an extension of five working days for Cambrian to send a copy of the Direction Order to its clients and make certain certifications to the FMA.
A copy of the Order can be found here.