Forex TB Hit with £276,100 Fine by FCA Over Customer Exploitation

The Financial Conduct Authority (FCA) has imposed a fine of £276,100 on Forex TB Limited (FXTB), a Cypriot firm specializing in contract for differences (CFDs), due to regulatory violations. This penalty arises from findings that FXTB did not uphold fair treatment standards for its customers and provided investment advice without proper authorization.

The FCA’s investigation highlighted that FXTB engaged in aggressive practices, pressuring customers into CFD trading and sometimes urging them to borrow funds from family or friends to invest. Furthermore, FXTB frequently offered investment advice despite lacking the required regulatory approvals. Many of the firm’s clients were inexperienced traders who were not adequately informed about the risks associated with CFD trading.

Forex TB Limited Hit with £276,100 Fine by FCA Over Customer Exploitation

The investigation also revealed that FXTB facilitated the process for some clients to be classified as “professional clients” by encouraging them to provide false information. This classification allowed these clients to bypass the protections they would have received as “retail clients,” thereby exposing them to greater risks.

As a result of these issues, the FCA mandated FXTB to cease providing services to UK consumers as of 12 April 2021. Since then, the firm has not conducted any business in the UK. As of 10 October 2023, FXTB no longer holds any FCA permissions.

The FCA initially considered a fine of £1.215 million but reduced the amount after FXTB demonstrated that such a penalty would cause severe financial hardship.

Therese Chambers, Joint Executive Director of Enforcement and Market Oversight at the FCA commented, “FXTB’s misconduct was particularly concerning because it exploited customers who were vulnerable due to their inexperience. Our prompt action in April 2021 was essential in preventing further consumer losses.”

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