What the Court found

The Federal Court has found three contracts for difference (CFD) trading companies engaged in systemic unconscionable conduct between 2018 and 2020. The companies named in the judgment are:

Customer losses across the three companies totalled over $83 million.

Conduct identified by the Court

The Court found the companies engaged in the following conduct:

First-of-its-kind finding on overseas customers

In a finding described as a first for Australia, the Court found that USG breached its Australian financial services (AFS) licence obligations by offering services to customers in China while knowing those customers were likely breaking Chinese law, without warning them of that risk. The judgment confirms that AFS licence obligations extend to overseas customers.

Liability of licence holders for authorised representatives

The Court's findings also address the liability of AFS licence holders for the conduct of corporate authorised representatives operating under their licence. The judgment records that USG, as the licence holder, was held liable for the conduct of such representatives.

Next steps

A case management hearing is listed for 19 February 2025, at which next steps including penalties will be determined. Further media releases on this matter are available at asic.gov.au/news-centre.

CFD product intervention order

ASIC's product intervention order on CFDs (reference 20-254MR, available at asic.gov.au) sets out conditions on leverage and sales practices that are already in force for businesses that issue or distribute CFD products to retail customers.

This is a plain-English summary for information only, not legal or compliance advice. Always check the official source or consult a qualified professional.