Cantor Index, the British spread betting firm, has been fined £70,000 (US$138,000) by the UK’s Financial Services Authority (FSA)as a reulst of a series of misleading adverts.
The FSA imposed the fine as a result of a promotion run by Cantor called Free Xda, which offered customers a ‘free’ handheld computer.
Cantor handed out flyers at London stations, and ran advertisements on television and in the popular press.
But the FSA said the company's senior management “failed to ensure there were adequate systems and controls in place”.
And a statement from the FSA said the adverts “did not contain adequate warnings about the risks of spread betting and consequently put a large number of potential customers at risk.”
"The provision of clear and fair financial promotions is a key priority for the FSA,” Anna Bradley, director of the FSA's retail themes division, said.
“This is particularly the case in relation to high-risk activities such as spread betting where the risk is that a customer could lose substantially more than his original deposit.
"Cantor Index should have paid more attention to the greater potential risk posed to less-experienced investors,” she added.
The FSA acknowledged that Canton had taken remedial action and no customers had suffered as a result of the promotion.
Spread Betting firms in the UK are overseen by the financial regulator rather than gambling authorities as the activity is viewed as a form of trading.
source : egaming review magazine
