ASIC Secures Record AU$300.2M Penalty Against USGFX, EuropeFX and TradeFred

An Australian court has ordered three collapsed CFD brokers, USGFX, EuropeFX and TradeFred, to pay a combined AU$300.2 million penalty over misconduct linked to their retail trading business between 2018 and 2020.

The Australian Securities and Investments Commission described the penalty as a record outcome in one of its regulatory cases.

Penalties imposed on three collapsed brokers

The largest penalty was imposed on Union Standard International Group Pty Ltd, which operated under the name USGFX. The company was ordered to pay AU$156.7 million.

EuropeFX was ordered to pay AU$114.1 million, while TradeFred was ordered to pay AU$29.4 million. The court orders have been temporarily stayed until 13 July 2026.

EuropeFX and TradeFred had previously acted as authorised representatives of Union Standard. The business was mainly linked to CFD offerings aimed at Chinese-speaking clients.

Court finds serious misconduct in CFD sales

The case focused on the way the brokers offered high-risk contracts for difference to retail clients.

According to ASIC, the firms used aggressive sales tactics and targeted inexperienced or vulnerable clients. The court found that their conduct was systemic and unconscionable.

For Union Standard, the case also included a finding that it failed to ensure financial services were provided efficiently, honestly and fairly.

EuropeFX faced additional orders. The court ordered it to return customer deposits, issued an adverse publicity order, and permanently restrained the company from providing financial services.

Client losses and broker profit model under scrutiny

The case also highlighted the conflict between retail CFD losses and broker revenue.

ASIC said that in the 2024 financial year, 68% of retail CFD traders in Australia lost money, with total losses of more than AU$458 million, including AU$73 million in fees.

The regulator also stated that EuropeFX and TradeFred profited from client losses in 95% to 99% of cases. This became one of the key points in the courts assessment of the business model.

Investor recovery remains uncertain

Although the penalty is large, it does not mean affected clients will automatically recover all losses.

The brokers involved have already collapsed, which may complicate compensation and fund recovery. For former clients, the final outcome may depend on liquidation processes, available assets, court orders and how customer deposits are handled.

The case shows the risk of dealing with high-pressure CFD sales operations, especially where the broker‘s revenue may be closely linked to client losses. It also underlines the need to check a broker’s regulatory status, operating entity, and financial condition before depositing funds.

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