The Federal Court has ordered record penalties totalling $300.2 million against collapsed contracts for difference (CFD) issuer Union Standard International Group Pty Ltd (Union Standard) and its former authorised representatives for systemic unconscionable conduct and other contraventions of the law between 2018 and 2020.
Maxi EFX Global AU Pty Ltd (trading as EuropeFX) and BrightAU Capital Pty Ltd (trading as TradeFred) were the two former authorised representatives of Union Standard.
Customers of EuropeFX and TradeFred lost more than $83 million.
His Honour Justice Wigney yesterday ordered:
- $156.7 million in penalties against Union Standard,
- $114.1 million in penalties against EuropeFX, and
- $29.4 million in penalties against TradeFred.
ASIC Chair Sarah Court said the penalties were the highest ever secured in connection with an ASIC matter and said the outcome would send a strong message of deterrence.
'These record penalties reflect the egregious nature of CFD issuer misconduct in this case.
'Union Standard, EuropeFX and TradeFred operated business models that deliberately targeted inexperienced and vulnerable people using aggressive sales tactics to pressure them to trade in highly risky CFD products.'
Union Standard was found liable for the conduct of EuropeFX and TradeFred, including their unconscionable conduct, as the Australian financial services (AFS) licensee that authorised them to operate (24-287MR).
The Court's decision underscores that AFS licensees remain and will be held fully accountable for misconduct carried out under their licence.
In addition to pecuniary penalties, the Court also ordered:
- an adverse publicity order against EuropeFX,
- a permanent restraint on EuropeFX from carrying on a financial services business, or a business related to financial products or financial services, or otherwise providing financial product advice, and
- that EuropeFX refund customers' net deposits.
The case marks the first time a civil penalty has been imposed against an entity, Union Standard, for failing to ensure its financial services were provided 'efficiently, honestly and fairly' by actively marketing and issuing its CFDs to customers in China when it knew, or ought to have known, those customers were being exposed to potential liability for breaching local Chinese law.
Ms Court continued, 'CFDs are complex, leveraged, over-the-counter (OTC) products that allow investors to speculate on price movements, often exposing them to significant losses.'
Account managers at EuropeFX and TradeFred reassured customers that the CFDs offered suited their financial situation and risk appetite. In reality, most customers lost money, and in up to 95% to 99% of cases, EuropeFX and TradeFred actually profited from their customers' losses. (24-287MR).
In the 2024 financial year, 68% of retail CFD investors in Australia lost money, totalling more than $458 million, including $73 million in fees (26-004MR).
'Over time, customers were pressured to trade more and more money, exposing them to financial losses they could not afford, before being discouraged from lodging or pursuing their complaints,' Ms Court said.
'Entities that profit from their clients' losses will face serious consequences. AFS licensees cannot outsource responsibility for misconduct carried out under their licence and will be held accountable.'
In delivering his reasons, Justice Wigney said, 'EuropeFX's contraventions were unquestionably egregious, deliberate and flagrant. By its conduct, EuropeFX systematically exploited many vulnerable and financially naïve and gullible customers for its own financial gain.'
His Honour continued, 'I find it difficult in this case to envisage a more serious case of contravening conduct. In my view, all the relevant circumstances of this case point to it being a case which warrants the strongest deterrence within the maximum penalty.'
Justice Wigney also highlighted the scale and impact of the misconduct on investors and the market, saying 'The contravening conduct occurred over a lengthy period of time and would no doubt have continued had ASIC not eventually intervened.
'It resulted in a very large number of vulnerable individuals, many of whom had relatively modest means, to suffer serious financial losses and consequently stress and anxiety. It undermined the integrity of Australia's financial services markets.'
'High penalties are needed to secure effective deterrence. They will send a clear message to other providers of financial services that stern penalties will be imposed for contravening conduct of the sort engaged in by these contraveners.'
The orders have been temporarily stayed until 13 July 2026.
