Australia’s financial regulator ASIC is continuing its action against suspended Retail Forex and CFD broker Forex Capital Trading Pty Ltd, which operates the ForexCT brand.

The regulator suspended the AFS license of ForexCT at the beginning of June, citing a list of improper behavior towards clients carried out by ForexCT and its management. Since then, the only action taken by ASIC was the imposition of a three year ban on a ForexCT account manager, Steven Marsh.

Well now it seems as if ASIC is going to ramp things up, beginning with a multi-million dollar lawsuit against both ForexCT and its sole director / shareholder, Shlomo Yoshai. We would note that these are civil proceedings, not criminal. Also, at least to date no regulatory action has been taken personally against Mr. Yoshai – the only regulatory ban so far has been issued against a former ForexCT account manager, as noted above.

In its lawsuit seeking up to AUD $3.7 million in combined damages and penalties against ForexCT and Mr. Yoshai, ASIC pointed out what is calls a “system of unconscionable conduct” which included high pressure sales tactics, offering deposit bonuses to clients and other incentives to transfer more money to ForexCT, recommending trading strategies that were inappropriate to clients, and making false or misleading statements to clients.

Overall, in a Wolf-of-Wall-Street comparison ASIC said that ForexCT under Mr. Yoshai’s influence implemented and encouraged a trading floor culture that was directed towards maximizing trading volume and client deposits, rather than promoting a culture of compliance with applicable legal requirements.

ForexCT also put in disincentives for clients to withdraw funds from their trading accounts. Account managers were paid bonuses primarily based on client “net deposits,” that is total client deposits less withdrawals.

We would note that this isn’t ASIC’s first action taken against Mr. Yoshai. In March of 2019 the regulator obtained a restraining order against ForexCT blocking the company from moving any money out of Australia, while also banning Mr. Yoshai from leaving the country.

ForexCT’s Australia website remains up at forexct.com.au, but with a pop-up notice (see at left) indicating that the company is no longer accepting new customers. However it does appear as if the company and its shareholder are still operating the ForexCT brand offshore, from an unidentified location, at forexct.com.

The full ASIC press release on the ForexCT lawsuit can be seen here.