LSG Group's Australian Financial Service Licence (AFSL) has been cancelled after investigations by the Australian Securities and Investments Commission (ASIC).

The retail derivative issuer, formerly known as NZ Global Financial Trading, Easy Capital Global, and AIFA Global, had authorisations to provide financial produce advice, deal in a financial product, and make a market in derivatives products to retail and wholesale clients.

ASIC found LSG had:

• Repeatedly failed to comply with the conditions on its licence and financial services laws, including failing to lodge financial statements, auditors reports, significant breach reports, and to notify ASIC of changes of control of the licensee or lodge a product disclosure statement in use notice.
• Made misleading or deceptive representations on its Australian website and its Financial Services Guide and PDS concerning products it offered, including a "Guaranteed Capital with Bonus Scheme Plan" and a "Cash Dividend Plan".
• Made misleading or deceptive representations on its Chinese website including an announcement and further statement promoting the "Guaranteed Capital with Bonus Scheme" plan, and a promotion titled "Win Double Profit for Expert Advisers Real Account. Expert Advisers masters can get $1 million US dollar".
• Failed to do all things necessary to conduct financial services in an efficient, honest and fair manner in relation to a deposit of US$100,000 received from an overseas client.

Related News: Wholesale service provider AFSL cancelled

ASIC commissioner, Greg Tanzer, said, "Licensees will not be absolved of their obligations, including those relating to previous or ongoing breaches by a change in control or ownership".

"Any prospective new owners and managers should ensure they conduct adequate due diligence before acquiring a licence and assume responsibility of the licensees obligations," he said.

This investigation was part of ASIC's focus on licensee compliance in the retail over-the-counter derivative sector, including margin FX, contracts for difference (CFDs), and binary options.