The High Court has fined the boss of trading firm 24HR Trading Academy for unlawfully advising on investments via WhatsApp messages.
Mohammed Fuaath Haja Maideen Maricar has been ordered to pay restitution exceeding £530,000 as a result. These funds will be paid to customers of the firm.
The court found 24HR Trading unlawfully provided trading signals to consumers via WhatsApp for a fee. These signals also included recommendations about CFDs relating to currencies and commodities.
The use of WhatsApp has come under increased scrutiny by the FCA since lockdown forced millions to work from home.
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.”
24HR Trading also encouraged consumers to open trading accounts with 'partnered brokers' to place their CFD trades. Maricar received significant sign-up and other commissions from these brokers.
Such conduct was found to constitute both financial promotion and making arrangements with a view to consumers acquiring investments.
All of this activity was in contravention of the Financial Services and Markets Act 2000. Both 24HR Trading and Mr Maricar were not authorised by the FCA.
Proceedings were commenced by the FCA in April 2020.
Jon Yarker is a freelance reporter for FTAdviser