AGM Markets, OT Markets, and Ozifin Tech will pay a total of $75 million in penalties after engaging in “systematic unconscionable conduct” while providing OTC derivative products to Australian retail investors.
When imposing the penalties, Justice Beach noted that OTC derivatives were complex and risky instruments and that clients’ trading losses translated to revenue earned by the defendants.
“One example highlighted by His Honour was that ‘the account managers engaged on behalf of OTM were instructed to ‘kill your customers’, which was a reference to the purpose of the defendants to encourage deposits and trades and ultimately for those clients to lose their funds,” ASIC said in a statement.
“And in advancing such a purpose, the account managers engaged by or on behalf of the defendants explicitly sought to and did win the trust of vulnerable investors’.”
AGM will pay $35 million, while OTM and Ozifin will pay $20 million each. The three companies will also have to pay refunds to approximately 10,000 former retail clients, along with ASIC’s court costs.
“AGM, OTM and Ozifin engaged in systemic unconscionable conduct, targeting unsophisticated investors and harming vulnerable consumers,” said ASIC deputy chair Daniel Crennan QC.
“The penalties handed down demonstrate the serious consequences for firms who engage in this sort of misconduct. The retail OTC derivatives sector remains a focus for ASIC, given misconduct identified across the sector. Where misconduct is detected, ASIC will continue to take strong enforcement action and hold wrongdoers to account.”
