Directors of now-cancelled AFSL XTrade banned for 3, 5 years

The former directors and responsible managers of the now-cancelled Australian financial services (AFS) licence holder, XTrade.AU, have been banned from carrying on a financial services business by the Australian Securities and Investments Commission (ASIC).

Shay Zakhaim and Anthony Anderson have been banned for three and five years, respectively, after an ASIC investigation that led to the business’s licence cancellation in April found both men failed to comply with financial services laws and the supervision of representatives between June 2018 and September 2022.

The investigation also found that XTrade, which deals in contracts for difference (CFDs) and foreign exchange contracts (FX contracts), engaged in unconscionable conduct.

According to ASIC, Anderson and Zakhaim contributed to XTrade’s failure to:

• “have adequate arrangements to manage conflicts of interest, which encouraged aggressive sales tactics by XTrade’s representatives towards Australian clients; and
• take reasonable steps to ensure its representatives complied with financial services laws until at least February 2022, including XTrade’s representatives using unfair tactics to entice Australian clients to deposit and trade with more funds than they initially wanted to.

“ASIC has reason to believe that Mr Zakhaim and Mr Anderson are not fit and proper, nor adequately trained or are not competent to provide financial services, act as an officer of, or control a financial services business.”

XTrade’s licence was first cancelled on 26 April by ASIC. The business applied to the Administrative Appeals Tribunal (AAT) on 29 April for a review, and after a hearing on 31 May, the application was denied. As of 19 June, XTrade’s licence remains cancelled after their application to the AAT was withdrawn.

Zakhaim and Anderson can appeal to the AAT for a review of ASIC’s decision. Their bans have been recorded on ASIC’s banned and disqualified register.