The High Court has ruled in favour of the Financial Conduct Authority in a trial against a trading signals provider and its sole director who operated via social media platforms.
In its judgment published today, the court found the activities of 24HR Trading Academy Limited, run by Mohammed Fuaath Haja Maideen Maricar, were unlawful as they had advised on investments without authorisation, and made false or misleading financial promotions.
24HR Trading sent trading signals to clients, who were told they would make ‘significant profits’ if they followed the instructions sent via WhatsApp and other messengers. These paid recommendations involved CFDs contracts on currencies and commodities.
“Unauthorised investment advice exposes consumers to the risk of substantial losses because the adviser has not met the FCA’s tests of competence and fitness; nor do consumers have access to the Financial Ombudsman Service or the Financial Services Compensation Scheme if things go wrong,” the court said.
Maricar was ordered to repay losses but had his liability capped at £530,000. The FCA secured a ‘restitution order’ that would distribute these funds to those who have suffered a financial loss as a result of the alleged breaches.
FCA Froze Maricar’s Assets
The court said Maricar engaged in financial promotions, made misleading statements to consumers and carried out regulated activities in the UK without authorisation.
In addition to monthly subscriptions he collected from the clients, the regulator claimed Maricar had earned commissions from a ‘partnered broker’ he recommended to sign up and place their orders through its platform.
The case was brought by the FCA in April 2020, which at this time had frozen £624,000 of the defendant’s assets.
“Neither 24HR Trading nor Mr Maricar were permitted to give investment advice which, in this case, included sending trading signals via social media, and their conduct risked substantial losses for customers. We urge consumers to make sure they are dealing with FCA authorised firms when seeking investment advice, including offers to provide tips or signals via social media apps, and to stay clear of unauthorised operators like 24HR Trading and Mr Maricar,” said Mark Steward, Executive Director of enforcement and market oversight at the FCA.