The High Court has delivered a summary judgement in proceedings commenced by the FCA ruling that 24HR Trading Academy Limited (24HR Trading), run by Mohammed Fuaath Haja Maideen Maricar, contravened the Financial Services and Markets Act 2000 (FSMA) by providing unauthorised investment advice to consumers via WhatsApp messages.
The Court also found that Mr Maricar was knowingly concerned in his company’s contraventions of FSMA.
Judge Jonathan Richards sitting as a Deputy High Court Judge also ordered Mr Maricar to pay restitution in excess of £530,000.
The recovered funds will be distributed to 24HR Trading customers. The Court has also made orders preventing 24HR Trading from further breaching FSMA.
The Court found that 24HR Trading unlawfully provided trading signals to consumers for a fee. The trading signals were sent via WhatsApp and contained recommendations about contracts for difference (CFDs) relating to currencies and commodities. The Court found that these signals amounted to unlawful investment advice.
Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA, said: ‘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.’
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.
24HR Trading also encouraged consumers to open trading accounts with 'partnered brokers' to place their CFD trades. Mr Maricar received significant sign-up and other commissions from these brokers. This conduct was found to constitute both financial promotion and making arrangements with a view to consumers acquiring investments.
24HR Trading and Mr Maricar were not authorised by the FCA or exempt from authorisation, and the promotional communications were not approved by an authorised person.
The FCA commenced proceedings in the High Court against 24HR Trading and Mr Maricar in April 2020. The 25 March 2021 summary judgment includes a restitution order against Mr Maricar and an injunction restraining 24HR Trading from continuing its unlawful signals business.