The Federal Court of Australia has announced a decision to fine several CFD brokers after numerous complaints from retail investors who lost money trading certain derivatives products, namely binary options contracts. The fines relate to AGM Markets Pty Ltd (AGM), OT Markets Pty Ltd (OTM), and Ozifin Tech Pty Ltd (Ozifin).
Customers of the broker lost a reported $32 million AUD while trading with the firms and filed numerous complaints with the country’s financial regulator – the Australian Securities and Investments Commission (ASIC), which first took action against the brokers in February 2018, when it suspended AGM’s license. AGM Markets will pay a fine of $35 million AUD while OT Markets and Ozifin will pay $20 million AUD each.
According to the news report, the three companies will have to initiate a refund process to the affected 10,000 trading clients. The Federal Court also appointed liquidators for all three companies, as they will not be able to continue to do business as licensed Australian entities.
Traders should remember to always manage their trading risks and formulate a risk management strategy when choosing to trade Contracts for Difference (CFDs) or any other derivatives. For help, check out our Tips for All guide on how to manage risk during market volatility.