The Australian Securities and Investments Commission (ASIC) is seeking final orders from the Federal Court against companies and operators who had been depositing funds into an Allianz Metro account accumulated illegally from binary option trading.
ASIC had applied successfully for orders in Federal Court proceedings in July 2016 to have operators restrained from carrying financial services businesses. Freeze funds were also granted after users of two binary trading websites were found to have deposited funds to Allianz Metro.
The regulator has now alleged that Marshall Islands-based One Tech Media Limited (OTML) and Ultra Solutions MG, based in the United Kingdom offered these binary options on trading websites open to the Australian market without holding an Australian financial services license (AFSL).
ASIC confirmed OTML and Ultra Solutions MG engaged in unconscionable conduct by:
- not properly disclosing the risks faced;
- inducing customers to place larger deposits;
- failing to inform customers that initial wins and bonuses were only credited to non-existent accounts;
- encouraging retired and unemployed customers to access superannuation, credit or a second mortgage in order to trade in binary options;
- conducting unauthorised trades that ultimately made losses; and
- refusing requests by customers to withdraw funds or cancel trades.
The maximum pecuniary penalty faced for both OTML and Ultra Solutions MG is $1.8 million. A further case management hearing would be heard in Melbourne on 23 March 2018.