The Financial Markets Authority (AMF) imposed a fine of 400,000 euros on an intermediary and its manager operating in France for a Cypriot brokerage company, due to “failures” in their “professional obligations”, according to a press release on Tuesday.
This financial sanction is consistent with that requested during the meeting of the Sanctions Committee at the end of September by the representative of the AMF College: 300,000 euros against the online brokerage company France Safe Media (FSM) and 100,000 euros against its leader Lior Mattouk. This case was described as “unprecedented” because for “the first time”, the French stock market policeman was pursuing a “tied agent”, who worked in France for an investment services provider (PSI) based in Cyprus, VPR Safe Financial Group Limited. France Safe Media was mandated by this Cypriot company to offer “contracts for difference” (CFDs), risky financial products whose objective is to bet on the evolution of an asset without holding it. Five breaches of professional obligations were attributed to FSM and its manager.
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They were criticized in particular for a lack of verification of the qualifications of their sellers in financial matters, an insufficiency in the evaluation of clients of their knowledge of the risks inherent in CFDs - products which were nevertheless "highly speculative", recalled the representative of the college of the AMF - or even a “misleading” advertising communication. Over the inspection period, overall losses amounted to more than 3.3 million euros for 874 clients who invested in CFDs via France Safe Media, or an average of “3,800 euros” for each of them. The intermediary was also accused of having “lacked diligence” in requests to transmit documents to the AMF. In its press release on Tuesday, the AMF indicates that these financial sanctions are accompanied by “a ban on France Safe Media exercising the activity of tied agent and the order reception-transmission service (RTO) for a period of time. duration of ten years. Its manager is “banned from managing or directing an establishment carrying out the activity of tied agent and RTO service for a period of ten years”.
At the end of September, the lawyer for FSM and its leader judged the requested sanctions “excessive” and “unfounded”. The decision “may be subject to appeal”, recalls the stock market watchdog.