CFDs At Trial: IC Markets Faces Class-Action Lawsuit In Australia

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CFDs at Trial: IC Markets Faces Class-Action Lawsuit in Australia PlatoBlockchain Data Intelligence. Vertical Search. Ai.

International Capital Markets, trading as IC Markets, is facing a class-action lawsuit brought by Piper Alderman for selling contracts for differences (CFDs) instruments to retail investors. It was the second such class-action lawsuit faced by the Sydney-based broker.

Piper Alderman’s lawsuit represents “everyday Australian investors who have collectively lost hundreds of millions of dollars trading controversial financial products called [CFDs].”

CFDs are leveraged derivative instruments that are considered risky for retail investors. However, such instruments are legal in Australia, and the brokers, including IC Markets, offering them are regulated by the Australian Securities and Investment Commission.

The class-action lawsuit brings allegations of “unconscionable conduct and misleading and deceptive conduct” against the broker between September 2017 and March 2021. It highlighted that “investors suffered losses in circumstances where IC Markets did not adequately assess their objectives, financial situations and where the risks of investing were inadequately disclosed.”

Piper Alderman brought the class-action lawsuit against IC Markets after commencing a potential investigation last October. The lawsuit is being funded by United Kingdom-based Woodsford, also backing a similar class-action lawsuit against IG Markets.

“Woodsford is committed to backing this action against IC Markets on behalf of those people who have suffered loss trading these excessively risky and complex products,” said Woodsford’s Chief Investment Officer, Charlie Morris.

With the class-action, Piper Alderman is seeking to provide a remedy and recover losses for the retail investors involved.

“Piper Alderman is pleased to have commenced this class-action on behalf of everyday Australian retail investors, many of whom have suffered significant financial losses and distress as a result of being offered highly leveraged CFDs when they had little or no experience in trading complex financial products,” Piper Alderman’s Partner, Kate Sambrook, said.

Finance Magnates approached IC Markets for their take on the class-action lawsuit but did not receive any response as of press time.

Aussie Law Firms Hitting CFDs Brokers

The first class-action lawsuit against IC Markets was filed in December by Echo Law. The allegations against the broker in both lawsuits are similar.

Last May, Piper Alderman filed a class-action lawsuit against IG Markets, alleging the marketing of CFDs to inexperienced traders without any safeguards. The law firm Willian Roberts also brought a class-action lawsuit against IG Markets, and later, the two lawsuits against the broker were consolidated. Sydney-based Banton Group is also investigating against IG Markets.

Plus500 and CMC Markets are two other brokers facing class-action lawsuits in Australia for offering CFDs.

Piper Alderman’s lawsuit represents “everyday Australian investors who have collectively lost hundreds of millions of dollars trading controversial financial products called [CFDs].”

With the class-action, Piper Alderman is seeking to provide a remedy and recover losses for the retail investors involved.

Finance Magnates approached IC Markets for their take on the class-action lawsuit but did not receive any response as of press time.