The Australian Securities and Investment Commission (ASIC) ordered on Monday a five-year ban on trading on Apple Investment Company and a three-year ban on providing financial advice on Alec Khoo & Associates.
Foreign-exchange dealers are seen beneath an electronic board displaying the Japanese yen's exchange rate against the U.S. dollar at a forex trading company in Tokyo on Feb. 22.
The trading prohibition on Apple, based in Gold Coast, Queensland, is due to false or misleading statements Apple made to its clients regarding its forex trading platform, FX Calibre.
Apple told clients that it could generate 42 per cent profits in three months, citing its historical performance in 2010 through an Apple Managed Fund which was non-existent. However, the bases for that claim were simulated returns on a demonstration account that was not FX Calibre.
The trading firm also claimed that clients could invest in Apple's managed discretionary account even if the company was not authorised to offer the instrument. Another false claim was that Apple could provide clients with a daily report that outlines the investments made by the firm's head trader, but no one was trading for the company.
ASIC had also previously advised Apple that its Apple Tree programme was non-complaint, but it continued to promote the Apple Tree which promises commissions from trading made by family or friends they referred to Apple.
"ASIC wants investors to participate in the financial system with confidence. The provision of misleading information to clients by Apple erodes this confidence," ASIC Commissioner Peter Kell said in a statement.
Apple Investment was established in 2008 by 31-year-old Robert Henley from Canada. However, ASIC did not prohibit Mr Henley from registering another trading company and offering similar services.
ASIC also banned Alec Khoo & Associates, based in Adelaide, to provide financial services for three years because of Mr Khoo's failure to provide a reasonable basis for advice to clients who borrow funds through a margin lending facility and investment the bulk of those funds in cash investments. Due to his advice, his clients lost a significant part of their investment portfolio because the interest paid on the borrowed money was higher than the interest they earn from their cash investments.
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