The UK Financial Conduct Authority (FCA) has fined Cypriot CFD broker Forex TB Limited (FXTB) £276,100 for failing to treat its customers fairly, and for providing investment advice without being authorised to do so.
FXTB pressured customers to put their money at risk through CFD trading, even encouraging them to borrow money from friends or family in some cases.
Compounding these failings, FXTB frequently provided its customers with investment advice, despite not being authorised to do so.
FXTB’s customers were inexperienced in trading and did not always understand the risks associated with CFDs, which were also not fully explained to them. FXTB also enabled customers to become ‘Professional Clients’ by encouraging them to provide false information. This meant these consumers lost the protections that as ‘retail clients’ they would have had.
The FCA required FXTB to stop providing services to UK consumers on 12 April 2021. No business in the UK has been conducted by FXTB since this date. From 10 October 2023, FXTB no longer held any FCA permissions.
The regulator would have imposed a fine of £1.215 million, however FXTB demonstrated that this would cause it serious financial hardship.
