FX week in review: USGFX bankruptcy missing funds; AxiTrader rebrands; broker fines

Gerald Segal 0 Comments October 3, 2020

The story of the bankruptcy of Australian Retail FX broker USGFX just got stranger. And, potentially, a lot bigger.

This week’s top FX industry news stories also included:

the rebranding of Australia’s AxiTrader,
a number of fines handed out by regulators in the US and Cyprus to Retail FX brokers, and
executive moves involving firms such as Capital.com, Equiti Group, IG Group, NAGA Group, and CMC Markets.

And once again, all the week’s top stories appeared first or exclusively at FNG. Some of the top forex industry news items to appear on the pages of FNG this past week included:

USGFX bankruptcy update: $14M missing with UPay, $137M deposit claims. The story of the bankruptcy of Australian Retail FX broker USGFX just got stranger. And, potentially, a lot bigger. The administrators for bankrupt Union Standard International Group Pty Ltd, which operated the USGFX.com brand in Australia, have issued an update for creditors of the company which details (lots of!) missing money offshore, uncertainty as to who really owned or owns the company, an inability to sell the company’s key assets, and even more uncertainty as to how long the whole liquidation process might take – and what creditors might get back on the dollar. The report continues to give doubt as to how long the whole process might take (it will be long), and how much money they will ultimately recover.

AxiTrader sponsors Manchester City, becomes Axi. Some major news out of Australia based AxiTrader, one of the country’s leading Retail FX and CFD brokerage firms. With the first past being, the brand will now be known just as “Axi”. Visitors to the firm’s old web address of axitrader.com are now rerouted to axi.com. The company also sports a new logo, with the letters “axi” all in lower case. Second, the newly minted Axi announced what amounts to the company’s first foray into international sports sponsorships. Axi said that it has inked a multi-year partnership with English Premier League club Manchester City FC. As noted this is the first major sports partnership for Axi and the company said it will help it create global awareness for its new tagline ‘Trade your edge‘ through high-profile placements within the Etihad Stadium, on the Man City website and also through activations with customers and fans online and at events with a range of exclusive offers and promotions.

Gain Capital fined for lax oversight of Introducing Broker. Retail FX brokerage group Gain Capital, parent of the FOREX.com brand, has received a fine of $300,000 related to issues stemming from accounts brought to the company by Introducing Broker Foremost Trading LLC. U.S. derivatives regulator Commodity Futures Trading Commission (CFTC) announced that it issued an order filing and settling charges against registered futures commission merchant Gain Capital Group, LLC, of Bedminster, New Jersey, for supervision violations related to its handling of customer accounts introduced by an independent introducing broker that was subject to a prior CFTC enforcement action for fraud and other violations. The order requires Gain to pay a civil monetary penalty of $300,000.

FXGM parent Depaho Ltd settles on €270K fine with CySEC. Cyprus financial regulator CySEC has announced a fine of €270,000 settling charges against Depaho Limited, parent of Retail FX broker FXGM. The decision put out by CySEC on the matter (see full text below) is fairly vague, but hints at issues including proper organization of the company, conflicts of interest, and order execution. We view this as the latest in a series of moves by the Cypriot regulator to “clean up” the Retail FX business which flourishes on the EU island state. Other recent fines handed out by CySEC include to Libertex, 24option, Tradernet, OffersFX, and FINFXPRO.