The High Court has fined the boss of a Bow-based forex trading business after it provided unauthorised investment advice to customers via WhatsApp.
Mohammed Fuaath Haja Maideen Maricar was ordered to pay restitution in excess of £530,000. The recovered fund will be distributed customers.
The court found 24HR Trading, an unregulated firm, unlawfully provided trading signals to customers for a fee. The trading signals were sent via WhatsApp and contained recommendations about contracts for difference (CFDs) relating to currencies and commodities.
The court found these signals amounted to unlawful investment advice.
Unauthorised investment advice exposes consumers to risk of substantial losses because the adviser has not met the financial watchdog’s tests of competence and fitness. Nor do customers have access to lifeboat schemes if things go wrong.
24HR Trading also encouraged customers to open trading accounts with ‘partnered brokers’ to place their CFD trades. Maricar received a significant sign-up bonus and other commissions from these brokers.
Financial Conduct Authority (FCA) executive director of enforcement and market oversight Mark Steward said: “Neither 24HR Trading nor Mr 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 Mr Maricar.”
24HR Trading could not be reached for comment.