AvaTrade has paid a $244,000 fine to settle allegations it was operating as an unregistered entity in violation of a Canadian province’s securities laws.
According to a statement by the Alberta Securities Commission (ASC), . (Ava Trade) operated online trading platforms that allowed Alberta residents to trade contracts for difference (CFDs on cryptocurrencies, forex, equities and commodities.
The ASC said that the settlement resolves allegations that AvaTrade’s British Virgin Islands-regulated subsidiary violated Alberta securities law by issuing and distributing these products without a prospectus.
has agreed to pay an administrative penalty worth $30,000 and to disgorge $213,428.00 representing its net revenue from the trades made by the province’s residents.
The settlement with Ava Trade involved an acknowledgement that it had breached the registration and prospectus requirements, meaning that it had to admit to the regulator’s allegations.
Between May 2015 and August 2018, Ava Trade opened approximately 372 accounts for Alberta investors. During this period, the company generated more than $202,000 in revenues from swaps, fees and spreads in the .
The second fine in Canada
Aside from the monetary settlements, Ava Trade agreed with the ASC to implement internal controls and procedures to prevent Alberta residents from opening accounts. Among other procedures, the company will transfer all Canadian clients to a local broker, as well as restricting traffic from Canada to its websites.
AvaTrade also confirmed that it has closed all of its Canadian client accounts and liquidated their trades by November 14, 2018.
Meanwhile, the watchdog explained that the brokerage did not specifically target local investors. It added that even though AvaTrade ran afoul of securities laws, the misconduct resulted from some degree of inadvertent behavior and staff found no evidence of dishonest conduct.
“Ava Trade was proactive and collaborative throughout the resolution of this matter. The company is receiving credit for exemplary cooperation under the Policy in the terms of this Agreement,” the ASC said.
This is not the first time AvaTrade has been fined in Canada. Earlier last year, the hit the firm with nearly $4.3 million in multiple regulatory fines for improperly selling derivatives to Ontario investors.
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