An Australian court has ordered USGFX, EuropeFX and TradeFred, three now-defunct CFD brokers, to pay a combined total fine of A$300.2 million for their “systematic unconscionable behaviour” between 2018 and 2020. It is a “standard penalty” guaranteed by ASIC in a regulatory matter.
Severe penalties for now-defunct CFD brokers
Union Standard’s Australian entity was hit with the highest penalty of A$156.7 million, while EuropeFX and TradeFred must pay A$114.1 million and A$29.4 million, respectively.
However, the court orders have been temporarily suspended until July 13, 2026.
EuropeFX and TradeFred were formerly authorized representatives of Union Standard, operating under the name USGFX.
Related to: EuropeFX’s only manager banned in Australia for 5 years
Union Standard’s Australian unit primarily provided CFDs to Chinese clients. The civil penalty imposed on her was also the first for failing to ensure that her financial services were provided “efficiently, honestly and fairly.”
“Union Standard, EuropeFX and TradeFred operated business models that deliberately targeted inexperienced and vulnerable people using aggressive sales tactics to pressure them into trading high-risk CFD products,” ASIC Chair Sarah Court said.
In addition to the penalty, the court also ordered an adverse publicity order against EuropeFX and a permanent restraining order prohibiting it from providing financial services. The platform must also return its customers’ deposits.
Clients lose money, while brokers make it
The ax fell on Union Standard in mid-2020 When I entered volunteer administrationfollowed by the cancellation of its Australian license and an investigation by the regulatory body. The broker’s unit is also regulated in the UK She lost her license after two years.
According to ASIC data, 68 per cent of retail CFD traders in Australia lost money in FY2024, totaling more than A$458 million, including A$73 million in fees.
The regulator also highlighted that EuropeFX and TradeFred profited from their clients’ losses in 95% to 99% of cases.
“Entities that profit from their clients’ losses will face serious consequences,” the ASIC tribunal continued.
This article was written by Arnab Shomi at www.financemagnates.com.
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