Cyprus-based financial markets regulator CySEC has taken strict action against two PFX Financial executives including CEO Evgenios Martinides who has received a 10-year ban for negligence and omission in regulatory procedures.
The regulatory authority revealed that it took action against the CEO and PFX Financial’s executive director known as Yaroslav Martynenko for violating business obligations. The two executives reportedly failed to follow the proper procedure while providing financial services to customers. CySEC also claims that PFX Financial, which is the parent company of FXFINPRO Capital, also failed to provide accurate and complete financial accounts as per regulatory requirements.
CySEC claims that Martinides and Martynenko are to blame because the negligence and omission took place during their tenure. The regulatory watchdog has withheld PFX Financial’s CIF authorization since October 2018 to allow for investigations to take place. Following the investigations, the two executives were found at fault for failure to comply with Section 28(1) of the law, Section 36(1)(a), and Section 139(1).
The regulator decided to slap Martinides with a €350,000 fine, as well as a 10-year ban preventing him from being involved in the financial sector for an entire decade. Martynenko was also banned from the financial sector but for 3 years which is more lenient duration compared to his counterpart.
What does this mean for FXFINPRO clients?
Financial circumstances will likely not allow FXFINPRO or its parent company to meet their financial obligations in the future. However, there is good news for clients thanks to the fact that the broker was a part of the Investor Compensation Fund (ICF). The latter is a fund that was developed to protect clients by providing compensation especially when a member fails to compensate them.
This means that FXFINPRO clients will receive compensation. However, the amount that each client should expect in compensation will be based on the contractual agreement that governed his relationship with the broker. The maximum amount that individual clients will receive in compensation will not exceed €20.000.