The Estonian Financial Supervision and Resolution Authority, also known as Finantsinspektsioon, fined Admiral Market Markets AS a sum of €32,000. The regulator slapped the broker’s locally registered entity Admiral Markets Group with the monetary fine on Tuesday.
Finantsinspektsioon accused Admiral Markets Group of mishandling 2020’s negative oil price crisis. The crisis occurred when Coronavirus lockdown in China affected oil trade in Russia and the UAE.
Consequently, the price of US oil Benchmark the West Texas Intermediate (WTI), went into the negative territory in April 2020. The havoc caught many trading platforms off guard, with many having to halt their trading services for crude oil futures.
The Estonian regulator said that without giving any notice, the brokerage firm made significant changes to its financial instruments’ terms of service. More specifically, Admiral Markets altered the methodology of computing the current price of crude oil. The broker also increased overnight holding fees for particular securities.
Finantsinspektsioon clarified that platforms like Admiral Markets, which offer complex financial instruments, should be totally forthcoming with customer transparency. In fact, while making the changes, the regulator believes that the broker was not acting in the interest of clients.
“The change process and grounds were not transparent to customers.”
This forced clients who had acquired the financial instruments to restructure their operations without any notice. Clients also had to take into account the loss of potential income and/or costs.
Additional Admiral Market’s news says that the broker has responded to the fine with a contesting statement. The broker said that the regulator did not account for all market-specific circumstances while delivering the verdict.
CEO of Admiral Markets, Sergei Bogatenkov, said that the company did act in the best interest of its clients. Changing the terms of financial instruments ensured the continuation of trading services, according to Bogatenkov.
“We have always been committed to ensuring that the interests of our customers around the world are safe. In this situation, we stood up to reduce the potential impact on our customers.”
Bogatenkov added that the company always strives to be a quality leader and to offer total transparency in trading services.
“We informed our customers early on of possible anomalies in the financial markets and asked them to be vigilant.”
Through this statement, Admiral Markets rebutted almost all the bases on which it was penalized by the broker.
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