ASIC warns of scam investment opportunities in new alert list
The Australian Securities and Investments Commission has released a new investor alert list aimed at helping consumers recognise fraudulent and scam investment opportunities before risking money on them.
The list, which replaces a previous “Companies you should not deal with” list ASIC maintained, includes domestic and international entities the regulator suspects of operating and offering services to Australians without the appropriate licenses, exemptions, authorisation or permission.
So-called impersonation scams or imposter entities, which impersonate or falsely claim to be associated with a legitimate business, will also be included on the investor alert list, which warns users that “if it’s no on the list, don’t take the risk”.
“Unlicensed and imposter investment opportunities cause serious financial and nonfinancial harm, significantly eroding consumer trust and confidence,” ASIC deputy chair Sarah Court said.
“There are bad actors out there, and while we can’t avoid being targeted, having access to the right information can help consumers better protect themselves.
The list at launch included 52 unlicensed entities and 25 websites impersonating legitimate entities; it currently lists more than 1,300 entities in total. ASIC noted that the list is not exhaustive and said it will continue adding to it.
The regulator also warned that there may be websites or entities not yet appearing on the list that may be engaging in scam behaviour of which ASIC is not aware.
“ASIC is calling on industry and consumers to assist us in identifying suspicious investment websites by reporting them to Scamwatch to assist our investigation and actions,” Court said.
ASIC timed its publication of the investor alert list as part of the government’s Fighting Scams initiative to address online fraud and protect Australians from financial harm, it said.
OTC derivatives targeted
In a separate release, ASIC said it has overseen more than $17.4 million in compensation payments to more than 2,000 retail clients since March 2021 in connection with noncompliant over-the-counter (OTC) derivative products.
Eight issuers of OTC derivatives breached financial services laws, the regulator found, including seven issuers of contracts for difference (CFDs) that exceeded leverage ratio limits. Those companies have agreed to pay a combined $4.3 million to more than 1,500 retail clients.
The eighth issuer, Binance Australia Derivatives, has agreed to pay $13.1 million over its incorrect classification of 523 retail and wholesale clients, breaching “various other” laws governing financial services. Binance has since voluntarily cancelled its Australian financial services license.