IC Markets faces a class-action lawsuit for alleged misleading conduct in selling CFDs to Australian retail investors.
After successfully launching IC Shares, Australia-based IC Markets forex broker has been dragged into a legal tussle after law firm Piper Alderman kicked off a class-action lawsuit against them. The action, on behalf of Australian retail investors, in its essence, alleges the broker of using unconscionable tactics and misleading strategies surrounding selling CFDs.
The use of CFDs (highly leveraged derivative instruments) as an investment tool has always been perceived as high-risk, especially for retail investors. In Australia, they are by law and also regulated by the Australian Securities and Investment Commission (ASIC); concerns persist on incomplete assessment of investor objectives and financial situations and inadequate disclosure of potential risks.
Piper Alderman's class action complaint asserts that this no requotes broker engaged in insufficient information disclosure in the period from September 2017 to March 2021, which resulted in huge financial losses. However, a legal action backed by UK-based funding Woodsford indicates a growing trend of litigation against CFD brokers in Australia.
In response to the lawsuit, this fast-execution broker strongly argues for its practices, asserting the claims as "utterly baseless" and reiterating that it would fiercely fight the lawsuits. By its admission, IC Markets forex broker values regulatory compliance and ethical service instead of lawsuits. This widespread trend is fueled by plaintiffs, lawyers, and litigation funders.
Amid the legal battles, the result of litigation may revamp the CFD landscape in Australia and pressure the government to institute more regulation and more stringent control over brokers' practices. Investors keep their eagle eyes on these pending cases, hoping for the bright light of transparency and holding someone accountable.
Stay updated on our forex broker news for more information on IC Markets forex broker.