An Australian court has ordered three collapsed CFD brokers—USGFX, EuropeFX and TradeFred—to pay a combined AU$300.2 million penalty for what regulators described as “systemic unconscionable conduct” between 2018 and 2020.
The ruling marks the largest penalty ever secured by the Australian Securities and Investments Commission (ASIC) in a regulatory enforcement case.
According to the court decision, Union Standard International Group Pty Ltd, the operator of USGFX in Australia, received the largest penalty of AU$156.7 million. EuropeFX was fined AU$114.1 million, while TradeFred was ordered to pay AU$29.4 million.
The court orders have been temporarily stayed until July 13, 2026.
Brokers Accused of Targeting Vulnerable Investors
EuropeFX and TradeFred previously operated as authorised representatives of Union Standard, which conducted business under the USGFX brand.
ASIC found that the brokers targeted inexperienced and vulnerable investors through aggressive sales practices, encouraging them to trade complex and highly risky Contracts for Difference (CFD) products.
“Union Standard, EuropeFX and TradeFred operated business models that deliberately targeted inexperienced and vulnerable people using aggressive sales tactics to pressure them to trade in highly risky CFD products,” ASIC Chair Sarah Court said.
The Australian regulator noted that USGFX primarily marketed its services to Chinese investors.
In a significant first, Union Standard was also penalised for failing to ensure that its financial services were provided “efficiently, honestly and fairly,” a key requirement under Australian financial services laws.
Profiting from Client Losses
ASIC revealed that EuropeFX and TradeFred generated profits from client losses in between 95% and 99% of cases, highlighting a business model that benefited directly when customers lost money.
“Entities that profit from their clients’ losses will face serious consequences,” Sarah Court added.
The crackdown follows the collapse of Union Standard in 2020, when the company entered voluntary administration. Its Australian financial services licence was subsequently cancelled, while its UK-regulated entity later lost its regulatory authorisation as well.
For investors, the case serves as a stark reminder that promises of easy profits often come with significant risks. Before opening an account with any broker, traders should conduct thorough due diligence and remain cautious of firms that rely on pressure-selling tactics or profit directly from client losses.
