The UK high court has ruled that a financial education firm breached the Financial Services and Markets Act 2000 (FSMA).
24HR Trading Academy provided unlawful investment advice and illegally promoted contracts for difference (CFD) trading, judge Jonathan Richards said.
The legal proceedings against the firm were commenced by the Financial Conduct Authority in April 2020.
According to the regulator, the education company gave financial advice to its customers via WhatsApp messages.
The FCA said that 24HR Trading is run by Mohammed Fuaath Haja Maideen Maricar, who was “knowingly concerned in his company’s contraventions of FSMA”.
The high court judge handed down a restitution order in excess of £530,000 ($731,121, € 614,980) to Maricar.
The money will be distributed to 24HR Trading customers, and the court has already made orders preventing the firm from further breaching the FSMA.
The judge made an injunction against the company “restraining it from continuing to transmit trading signals or otherwise provide advice on the merits of buying, holding or subscribing for CFDs, spread betting contracts and/or options”.
Unlawful and unregulated
The high court found that the company unlawfully provided trading signals to its clients for a fee. These signals were sent via Whatsapp and gave recommendations about CFDs relating to currencies and commodities.
The judge found that this amounted to “unlawful investment advice”, the FCA said.
24HR Trading also encouraged customers to open trading accounts with “partnered brokers” to place their CFD trades.
Maricar received significant commissions from these brokers, as a result. The court ruled that Maricar’s and his firm’s conduct constituted both financial promotions and making arrangements with a view to consumers acquiring investments.
Maricar and 24HR Trading Academy were not authorised by the regulator or were exempt from authorisation, and their promotional communications were not approved either.
Mark Steward, executive director of enforcement and market oversight at the FCA, said: “Neither 24HR Trading nor Maricar were permitted to give investment advice which, in this case, included sending trading signals via social media and their conduct risked substantial losses for customers.
“We urge consumers to make sure they are dealing with FCA-authorised firms when seeking investment advice, including offers to provide tips or signals via social media apps, and to stay clear of unauthorised operators like 24HR Trading and Maricar.”
