International Capital Markets Australia (IC Markets) is facing a class-action lawsuit brought by Piper Alderman over its sale of contract for difference (CFD) instruments to retail investors.。It is the second similar class-action lawsuit facing the Sydney-based brokerage.。

Piper Alderman's lawsuit represents "the Daily Australian investor who collectively lost hundreds of millions of dollars when trading a controversial financial product, CFD."。"

CFD is risky but legal.

CFDs are leveraged derivatives that are considered risky for retail investors。However, such instruments are legal in Australia and the brokerage firms that offer them, including IC Markets, are regulated by the Australian Securities and Investments Commission.。

The class-action lawsuit alleges "unjust and misleading conduct" by the brokerage firm between September 2017 and March 2021, stressing that "investors suffered losses when IC Markets failed to adequately assess its objectives, financial condition, and investment risk under disclosure."。"

Piper Alderman filed the class-action suit last October after he began a potential investigation into IC Markets.。The suit was funded by UK-based Woodsford, who also backed a similar class action lawsuit against IG Markets.。

"Woodsford is committed to supporting this lawsuit against IC Markets on behalf of those who have suffered as a result of trading these overly risky and complex products," said Charlie Morris, Woodsford's chief investment officer.。

Through this class-action lawsuit, Piper Alderman hopes to provide remedies and recover losses for retail investors involved。

"Piper Alderman is pleased to have filed this class action on behalf of Daily Australian Retail Investors, many of whom have suffered significant financial loss and distress as a result of being offered highly leveraged CFD with little or no experience trading complex financial products," said Kate Sambrook, a partner at Piper Alderman.。

Finance Magnates contacted IC Markets about the class action, but had not received a response as of press time。

Australian law firm targets CFD brokers

In December, Echo Law filed its first class-action lawsuit against IC Markets.。The charges against the brokerage firm are similar in both lawsuits。

In May last year, Piper Alderman filed a class-action lawsuit against IG Markets, accusing the company of marketing CFD to inexperienced traders without any safeguards.。Law firm William Roberts also filed a class-action lawsuit against IG Markets, and later, two lawsuits against the broker were merged.。Sydney-based Banton Group is also investigating IG Markets。

Plus500 and CMC Markets are two other brokers facing class action lawsuits in Australia for offering CFD。