Glasgow-based CFD broker Direct Sharedeal has gone into administration, leaving a number of traders and investors out of pocket and sparking a fierce row between the company and the independent financial advisers responsible for the majority of their client referrals.
Recently-collapsed Glasgow-based CFD broker Direct Sharedeal has today been caught in the crossfire following criticism of its vetting of investment clients referred from independent financial advisers (IFAs).
A number of investors have suggested that they were wrongfully deemed suitable for high-risk CFD investments, leading to extensive capital losses when the firm collapsed. However, Direct Sharedeal have pointed the finger at the IFAs responsible for referring the bulk of their clients, suggesting that the burden of pre-validating clients rests on the shoulders of those advisers referring their clients to CFDs.
Regulatory Legal, the firm responsible for representing the interests of some Direct Sharedeal investors said that under the FSMA 2000 rules, Direct Sharedeal were responsible for ensuring clients were suitably informed of the risks and pitfalls of trading in highly leveraged instruments.
Direct Sharedeal has come under increasing FSA scrutiny of late, following a fine in excess of £100,000 over alleged misleading sales practices.