Mr Andrew Jeffers, a Certified Practising Accountant from Sydney, NSW, has been banned from providing any financial services until 21 May 2018.

Mr Jeffers was banned after ASIC found that GTL Trade Up Pty Ltd (In Liquidation)(GTL), a company of which Mr Jeffers was a director, issued three product disclosure statements (PDSs) between the period March 2012 and March 2013 that included statements which were materially false or misleading.

GTL was issued with an Australian financial services licence (AFSL) in January 2011 to carry on financial services business to deal in and advise on a range of financial products, including derivatives and foreign exchange (FX) contracts. 

The main liquidity provider of GTL was Dubai-based GTL Trading DMCC (DMCC). Mr Mahmood Riaz was the director of DMCC and at various times, GTL. Mr Riaz was not an officeholder of GTL at the time it was issued an AFSL.

While Mr Jeffers was a director, GTL issued the three PDSs which included statements that ASIC found to be false or materially misleading in that they did not represent the true trading position undertaken by GTL. These statements were:

• GTL Tradeup executes a back to back transaction for each client transaction with our parent entity GTL Trading DMCC;
• GTL Tradeup's business is based on flow, spread/commission and leverage financing margin. GTL Tradeup does not take the other side of a client's position with the intent to benefit from a client loss;
• GTL Tradeup does not take proprietary positions based on an expectation of market movements;
• GTL Trading DMCC and GTL Trading only conduct hedging with counterparties that are considered by Standard & Poors to be of an A+ or higher credit rating;
• Steps taken on a daily basis to ensure GTL Tradeup's financial requirements are maintained include, but are not limited to, ..transferring money owed to clients to segregated client accounts if needed.

Liquidators were appointed to GTL on 26 September 2013 after DMCC failed to make funds available to to GTL to meet client withdrawals. At the time GTL, was owed about $4.35m by DMCC. GTL owed about $4.4m to its retail clients.

Mr Jeffers has made an application to appeal to the Administrative Appeals Tribunal (AAT) for a review of ASIC's decision.

Background

ASIC has recently taken the following action in the margin FX and contracts for difference space:

• causing entities within the FX Primus group to make changes to its websites and to notify its Australian clients that it is not licensed to provide them with financial services (refer: 15-120MR)
• cancelling the AFS licence of FX provider Rainbow Legend Group Pty Ltd for failing to comply with its obligations and making false and misleading statements (refer: 15-108MR)
• cancelling the AFS licence of four licensees for failing to lodge annual statements (refer: 15-100MR)
• clarifying the scope of Advanced Markets Ltd's AFS licence (refer: 15-085MR)
• suspending the AFS licence of FX provider AGM Markets Pty Ltd (refer: 15-075MR).
• warning Australian investors not to deal with unlicensed forex broker, Grandegoldens (refer: 15-066MR).
• cancelling the licence of Efininium Pty Ltd for failing to have adequate risk management systems (refer: 15-026MR).
• shutting down Vault Market Pty Ltd and removing its sole director, Mr MD Anamul Amin, from the financial services industry (refer: 14-309MR).
• Pepperstone has agreed to cease providing financial services in Japan following inquiries by ASIC that revealed they were not licensed by the Japanese Financial Services Agency (refer: 14-267MR).
• commencing proceedings in the Federal Court of Australia to restrain Monarch FX, and its former director and general manager, Quinten Hunter, from carrying on a financial services business (refer: 14-342MR).
• cancelling the AFS licence of online FX broker Global Derivative Services Pty Ltd, after an investigation found it failed to comply with a number of its AFS licence obligations (refer: 14-226MR).
• following a surveillance, Calibre Investment changed the way it offers FX services to retail clients (refer: 14-327).
• restraining Monarch FX and its former director and general manager, Quinten Hunter, from carrying on a financial services business (refer: 14-342MR)
• warning investors not to deal with YoutradeFX (refer: 14-306MR). It is not licensed to trade in margin FX in Australia
• accepting an enforceable undertaking from online FX broker Forex Financial Services prohibiting it from operating managed discretionary accounts (refer: 14-036MR).

Editor's note:

On 4 November 2015, Mr Jeffers withdrew his application to appeal to the AAT.