The Australian Securities and Investments Commission (ASIC) has banned John Carlton Martin from providing financial services for a period of 10 years and from managing corporations for a period of 5 years.
Martin was a director and former responsible manager of Union Standard International Pty Ltd and ASIC believes that he has shown scant regard for compliance matters and hence this action.
The company was a retail OTC derivatives issuer for CFDs and its authorised representatives were TradeFred and EuropeFX. The company was operating with an Australian Financial Services (AFS) license.
ASIC found that Martin was responsible for the company not providing financial services in an efficient and regulated manner and it also failed to ensure that its representatives complied with the financial services regulations as laid down by the license.
Martin was the responsible manager for Union Standard from December 2014 to September 2019 and was the director from February 2019 and in July 2020, the company had entered into voluntary administration.
ASIC also found that Martin did not enforce any of the agreed compliance measures and even after being alerted of misrepresentations by EuropeFX and TradeFred to its clients, he did not do anything to reign them in or take corrective actions.
The representatives of TradeFred and EuropeFX had provided financial advice to their clients even though they were not licensed to do so and they did not alert their clients to the level of risk involved in their products while making representations to them. Some of their products were high-risk and complex products and so they needed to ensure a higher level of compliance but these were not followed.
The ASIC has been coming down hard on such activities in recent times and this is one more action that shows that they are serious about the cleanup. They believe that Martin is not capable of providing financial services in any form and that is the reason for the strict action at this point in time.
These transgressions were considered serious enough to warrant such a ban though Martin has a right to appeal this action. ASIC has been tightening the screws as far as regulatory activities are concerned and has been forcing financial firms to ensure that they comply with the rules and the regulations surrounding the license provided by them. In the long run, these may yield good results for the consumers though it could also lead to many companies taking flight to other countries where regulations are lax.