The UK's Financial Services Authority (FSA) announced last week that it has fined Cantor Index Limited £70,000 for running a misleading campaign promoting spread betting.
The financial services regulator criticised a Cantor advertising campaign entitled 'Free Xda' for Cantor Mobile, the firm's new spread betting device.
According to the FSA:
"The promotional material, which included flyers handed out at London stations, posters and advertisements on television and in the popular press, did not contain adequate warnings about the risks of spread betting and consequently put a large number of potential customers at risk."
One of the key risks of spread betting is that if a spread bet position moves against the customer they can lose far more than their initial deposit, and although the firm's terms and conditions contained risk warnings which the customer had to agree to before they could spread bet, the risk warnings were not deemed to be sufficiently prominent by the FSA.
The regulator also suggested that the structure of the offer of a "free" combined handheld computer and mobile telephone known as an "Xda" provided a strong incentive for consumers to spread bet.
Added to this, the service was promoted in a way that attracted the attention of relatively less experienced investors, and the firm did not consider the greater potential risk posed or take appropriate additional steps to ensure that those investors understood the risks associated with spread betting.
Speaking with regard to the advertising campaign, Anna Bradley, director of the Retail Themes Division of the FSA announced that:
"Cantor Index should have paid more attention to the greater potential risk posed to less experienced investors and the greater need to ensure that the risks associated with spread betting were likely to be understood by them. This should have been done through robust systems and controls."
However, the Financial Services Authority did acknowledge that no Cantor Index customers suffered any unreasonable losses as a result of the advertising campaign, and praised the remedial action since taken by the spread betting firm.
.
Network Tweets
Network BlogsContent
provided by
|
Archive | Resources | Partners | Site Map | Links | Newsletter Archive | Contact | RSS Feeds | About | Syndication | Advertising & Marketing | Recruitment | Terms & Conditions | Privacy & Cookies
Copyright © 2012 - All Rights Reserved - Tax-News.com
IMPORTANT NOTICE: Tax-News.com has taken reasonable care in sourcing and presenting the information contained on this site, but accepts no responsibility for any financial or other loss or damage that may result from its use. In particular, users of the site are advised to take appropriate professional advice before committing themselves to involvement in offshore jurisdictions, offshore trusts or offshore investments.
Write a comment