ASIC has banned former directors and responsible managers of XTrade.AU Pty Ltd (XTrade), Mr Shay Zakhaim and Mr Anthony Anderson, from carrying on of a financial services business, either as a director or responsible manager, for three and five years respectively.
XTrade offered clients opportunities to trade in contracts for difference (CFDs) and foreign exchange contracts (FX contracts).
ASIC has also cancelled the Australian Financial Service (AFS) licence of XTrade after finding it failed to comply with financial services laws between June 2018 and September 2022 and engaged in unconscionable conduct [24-122MR].
As directors and responsible managers, Mr Zakhaim and Mr Anderson were responsible for ensuring XTrade's compliance with financial services laws and the monitoring and supervision of its representatives.
ASIC found that Mr Anderson and Mr Zakhaim were involved in XTrade's failure to:
- have adequate arrangements to manage conflicts of interest, which encouraged aggressive sales tactics by XTrade's representatives towards Australian clients; and
- take reasonable steps to ensure its representatives complied with financial services laws until at least February 2022, including XTrade's representatives using unfair tactics to entice Australian clients to deposit and trade with more funds than they initially wanted to.
ASIC has reason to believe that Mr Zakhaim and Mr Anderson are not fit and proper, nor adequately trained or are not competent to provide financial services, act as an officer of, or control a financial services business.
The bannings are part of ASIC's ongoing work to ensure that officers of AFS licensees maintain high standards of judgment, diligence and professionalism in discharging their duties and responsibilities.
Mr Zakhaim and Mr Anderson have the right to appeal to the Administrative Appeals Tribunal for a review of ASIC's decision.
Mr Zakhaim's and Mr Anderson's bannings are recorded on ASIC's banned and disqualified register.
Background
ASIC cancelled XTrade's AFS licence on 26 April 2024.
Contracts for difference (CFDs) are leveraged derivative contracts that allow a client to speculate on the change in value of an underlying asset, such as foreign exchange rates, stock market indices, single equities, commodities or crypto-assets.
ASIC has pursued a range enforcement actions over many years against retail OTC derivatives issuers addressing misconduct in the sector.
In addition to its enforcement actions, ASIC has enacted the CFD product intervention order (PIO) from 29 March 2021, imposing restrictions on CFDs issued and distributed to retail clients.
ASIC's Moneysmart website has further information about forex trading and CFDs.
