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ASIC Wins Record AU$300.2 Million Penalty Against Collapsed CFD Brokers

An Australian court has ordered collapsed CFD brokers USGFX, EuropeFX and TradeFred to pay a record combined penalty of AU$300.2 million for systemic unconscionable conduct between 2018 and 2020. The ruling includes additional orders against EuropeFX and marks the first civil penalty for failing to provide financial services efficiently, honestly and fairly.

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An Australian court has ordered three now-collapsed contracts for differences (CFD) brokers — USGFX, EuropeFX and TradeFred — to pay a combined total penalty of AU$300.2 million for what the court described as "systemic unconscionable conduct" between 2018 and 2020. The Australian Securities and Investments Commission (ASIC) stated that this represents a record penalty secured by the regulator in a regulatory matter.

Union Standard's Australian entity, which operated under the name USGFX, received the largest penalty of AU$156.7 million. EuropeFX was ordered to pay AU$114.1 million, while TradeFred faces a penalty of AU$29.4 million. The court orders have been temporarily stayed until 13 July 2026.

EuropeFX and TradeFred were former authorised representatives of Union Standard. The Australian unit of Union Standard primarily offered CFDs to Chinese customers. The civil penalty against Union Standard was also the first imposed for failing to ensure that its financial services were provided "efficiently, honestly and fairly".

Findings on Business Practices

ASIC Chair Sarah Court said that Union Standard, EuropeFX and TradeFred operated business models that deliberately targeted inexperienced and vulnerable people. According to the court's findings relayed by ASIC, the firms used aggressive sales tactics to pressure customers into trading highly risky CFD products.

The regulator further highlighted that EuropeFX and TradeFred profited from their customers' losses in 95 per cent to 99 per cent of cases. Sarah Court warned that entities which profit from their clients' losses will face serious consequences.

Additional Court Orders and Market Context

In addition to the financial penalties, the court issued an adverse publicity order against EuropeFX and imposed a permanent restraint order preventing it from offering financial services. EuropeFX must also return its customers' deposits.

Union Standard entered voluntary administration in mid-2020, which was followed by the cancellation of its Australian licence and an investigation by ASIC. These developments ultimately led to the civil penalty proceedings.

ASIC data cited in the case show that 68 per cent of retail CFD traders in Australia lost money in the 2024 fiscal year, with total losses exceeding AU$458 million, including AU$73 million in fees. The regulator presented these figures as context for the risks associated with CFD trading and the impact of the misconduct identified in the court's decision.

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Common questions about this article

The systemic unconscionable conduct occurred between 2018 and 2020.
The combined total penalty is AU$300.2 million.
EuropeFX is subject to an adverse publicity order, a permanent restraint from offering financial services, and must return its customers' deposits.
USGFX (Union Standard's Australian entity), EuropeFX and TradeFred were ordered to pay penalties by an Australian court.

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