Forex CT Fined $20 Million Penalty over Systematic Unconscionable Conduct

Forex Capital Trading Pty Ltd (Forex CT), an Australia-based company, is ordered by Australia's Federal Court to pay a $20 million (AUD) for engaging in systematic unconscionable conduct, paying conflicted remuneration to its team leaders and account managers and failing to act in the best interests of its clients.

Shlomo Yoshai, the sole director of Forex CT, is also fined $400,000 and disqualified from managing corporations for eight years for breaching his duties as a director and aiding Forex CT’s unconscionable conduct.

The company's engagement in a system of unconscionable conduct involved the following:

- encouraging clients to invest in disregard of their financial condition and will;

- employing high-pressure sales tactics;

- recommending inappropriate strategies;

- misleading or deceiving clients;

- maximizing trading volume and client deposits rather than promoting compliance;

- rewarding staff based on net deposits made by their clients; and

- non-compliance.

In handing down his decision, Justice Middleton found that, "Forex CT had systemic compliance deficiencies and a culture of non-compliance."

In disqualifying Mr. Yoshai for eight years, the Justice described Mr. Yoshai's behavior as "incompetent and irresponsible."