4xCube Ltd, Regulated Cook Islands Broker to initiate legal proceedings against ASIC March 31st, 2020.
4xCube, the boutique brokerage firm licensed by the Financial Services Commission in the Cook Islands, has today announced that it will begin legal action against ASIC as it challenges a blacklisting by the regulator.
Such cases are rare, but despite having made repeated attempts to engage with ASIC since late 2019 in writing, by phone and with the offer of a face to face meeting, the regulator has refused to enter into dialogue with the brokerage.
João Monteiro, founder and Chief Executive of 4xCube, commented:
“We are reluctantly taking this decision after the regulator has stonewalled all attempts by ourselves to resolve this matter. Such action is rarely sought, but as regulatory reach in financial markets grows, it does ask the question ‘who is regulating the regulator’.”
Many regulators – including ASIC – prohibit financial services providers from making unsolicited approaches to prospective clients. It is believed that the claim in question may stem from a former third party Introducing Broker, whose commercial relationship with the company was terminated in May 2019.
João Monteiro, added:
“The fact that ASIC has taken this course of action without consulting either ourselves or our own regulator is a cause for concern. With no effective right of reply, we believe this unwarranted listing will have a detrimental impact on our business going forward,”
Cal Evans of legal firm Gresham International, added:
“Our client has attempted to engage with ASIC on several occasions to resolve this matter but the regulator has refused to enter into a dialogue, instead blacklisting this licensed entity.
As this is potentially damaging for 4xCube’s future business plans, they have been left with no option but to seek a remedy through the courts and action has now been initiated.”
Current regulation precludes FX brokers from soliciting business in many jurisdictions, including Australia. At no time has 4xCube sanctioned or undertaken such activity.