Australian financial services licensee, Online Capital Markets Pty Ltd (OCM), has paid $30,600 in penalties after receiving three infringement notices from ASIC for misleading online advertising.
The announcement builds on ASIC’s focus on licensee compliance in the retail over-the-counter derivative sector, including margin foreign exchange, contracts for difference and binary options.
According to ASIC, foreign exchange derivatives and contracts for difference are among the products available for trading on OCM’s margin foreign exchange trading platform.
While the payment of an infringement notice is not an admission of a contravention of the ASIC Act consumer protection provisions, OCM was found to have made a number of false claims in its advertisements and emails that promoted the company’s platform.
ASIC confirmed the advertisements were published online and by email between September 2014 and March this year. The nature of the claims rested in the advantages of using OCM’s financial service, including “$2,533 in just seven days!” and “Learn how you can increase your monthly income”.
The advertisements and emails were found to be misleading because:
- They gave the impression that OCM’s service could be relied upon to provide substantial profits quickly and to consistently increase one’s monthly income;
- They did not adequately convey that trading in margin foreign exchange derivatives and contracts for difference is high risk, provides volatile returns and does not guarantee consistent profits; and
- While they referred to risks and contained disclaimers, these messages were in fine print and were ineffective to correct the dominant message created by the headline claims.
ASIC Commissioner Greg Tanzer said that margin foreign exchange and derivative trading represented “high risk” and “volatile returns” for consumers.
“Consumers should not be misled by false claims about the level or consistency of returns achievable from such trading,” he said.
