Pepperstone

Last updated

Pepperstone Group Limited
Company type Private
Industry Financial services
Founded2010 (2010)
FounderOwen Kerr
Joe Davenport
Headquarters
Melbourne
,
Australia
Key people
  • Tamas Szabo (CEO)
  • Robert Bowen (COO)
ServicesFinancial Markets Access Forex Brokerage, MetaTrader 4, Contract For Difference(CFDs), cTrader
Number of employees
2,900 (FY 2024)[ citation needed ]
Website pepperstone.com

Pepperstone is a multi-regulated forex and CFDs broker providing trading services with forex, stocks, commodities and other asset classes. The company was founded in 2010 in Melbourne, Australia, by Owen Kerr and Joe Davenport. The group operates internationally through subsidiaries in the UK, Germany, Cyprus, Kenya, Bahamas, and the UAE.

Contents

History

Pepperstone was founded in 2010 by Owen Kerr and Joe Davenport [1] [2] but it did not receive its Australian Financial Services License (AFSL) from the Australian Securities and Investments Commission (ASIC) until February 2013. [3]

In 2014, the firm was ranked #1 on BRW Fast Starters, with reported revenues of $60m and 66% growth. [4] In 2015, it secured a license under the Financial Conduct Authority (FCA) in the UK. By that time the company had already obtained licenses in the UAE with the Dubai Financial Services Authority (DFSA) and in the Bahamas under the Securities Commission of the Bahamas (SCB). [5]

In 2016, Pepperstone sold a majority of its business to Champ Private Equity. [6] The equity firm later exited the company, selling its stake in 2019. [7] In February 2017, to comply with its FCA obligations, the firm closed down their UK operations. [8]

After Brexit, Pepperstone no longer could operate in European Union under Australian license. [9] To continue operations Pepperstone secured additional licenses from BaFin in Germany and CySEC in Cyprus by 2020. [5]

In May 2022, Pepperstone entered into a global sponsorship deal with the Association of Tennis Professionals (ATP), gaining naming rights to the official ATP rankings. [10] After February 2024, the naming rights were transferred to the Saudi Arabian Public Investment Fund. [11]

In June 2022, Pepperstone became an Approved Broker Member of the Financial Commission. [12]

In 2023, the UK subsidiary reported a net profit of over £10 million. However, it failed to break above the broker's revenue of £12.7 million in 2020. [13] The client funds decreased to £25.16 mln below the previous year’s £28.9 mln. In the meantime, Pepperstone reduced employee and legal expenses and tripled marketing expenses instead. [14] In particular, it announced a partnership with the Asian Football Confederation, [15] hired John McEnroe as a Global Tennis Ambassador, announced partnership with the Geelong Football Club, Adelaide Strikers, etc. [16]

In June 2024, Pepperstone introduced 24-hour CFD trading on US shares in collaboration with cTrader, MetaTrader, and TradingView. [17]

Regulation

After Brexit, to remain operational in EU, Pepperstone secured regulatory licenses in Germany and Cyprus. The company also expanded to Kenya and the UAE. [18] [19] [20] The company is authorized and regulated by several financial authorities: the Australian Securities and Investments Commission (ASIC), the FCA in the United Kingdom, CySEC Cyprus, DFSA Dubai, CMA Kenya, SCB Bahamas, and BaFin Germany. [21]

Pepperstone has offices in Melbourne, London, Düsseldorf, Dubai, Limassol, Nassau, and Nairobi. [21] [22]

Controversy

In October 2014, the Australian Securities and Investments Commission (ASIC) discovered that Pepperstone had been operating in Japan without a license from the Japanese Financial Services Agency. It was only after the ASIC report that Pepperstone notified its Japanese clients via email about the lack of a license and informed them that they could only withdraw their funds until December 31, 2014. [3]

Insider trading scam

In 2014, the Herald Sun reported that Pepperstone's head of sales, Joel Murphy, was fired after blowing the whistle on a $7 million insider trade scam. Murphy uncovered a scheme carried out by Lukas Kamay and Chris Hill, who gained 20,000% in profits, and informed his boss as well as the Australian Securities and Investments Commission. Murphy was fired on the day of their arrest and was denied bonuses exceeding $1 million. [23] [24] [25] The story was later covered in the press under the headline "Pepperstone helped the Australian Securities and Investments Commission and Australian Federal Police uncover Australia's largest insider trading case in history," without revealing that the person who initially discovered the fraud had been fired without receiving his rightful compensation. Murphy later founded a brokerage company and eventually hired one of the convicted fraudsters, Chris Hill, as a risk analyst, giving him a chance to recover from the incident and rebuild his career. [26] [27]

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References

  1. ↑ "Pepperstone rich list co-founder Owen Kerr shares $24m dividend". Australian Financial Review. 14 October 2015.
  2. ↑ Pash, Chris (21 November 2014). "The Pepperstone Guys Have Been Named Entrepreneurs Of The Year In Australia". Business Insider Australia. Archived from the original on 22 November 2014. Retrieved 2 March 2020.
  3. 1 2 "14-267MR ASIC concerns see Pepperstone exit the Japanese market". ASIC. 13 October 2014. Retrieved 21 October 2024.
  4. ↑ "Fast Starters 2014". BRW. Retrieved 17 December 2014.
  5. 1 2 Shome, Arnab (13 August 2020). "Pepperstone Gains Germany's BaFin License". Finance Magnates. Retrieved 21 October 2024.
  6. ↑ "Pepperstone finalises deal with Champ". The Australian. 3 March 2016. Retrieved 10 May 2017.
  7. ↑ "CHAMP to exit Pepperstone; new role for managing director Fiona Lock". Australian Financial Review. 8 September 2018. Retrieved 29 February 2020.
  8. ↑ "Pepperstone suspends Forex trading in the UK – LeapRate Exclusive". LeapRate. 28 February 2017. Retrieved 10 May 2017.
  9. ↑ Skinner, Celeste (7 July 2020). "Confirmed: Pepperstone is Seeking CySEC Licence as Part of Brexit Plan". Finance Magnates. Retrieved 9 October 2024.
  10. ↑ Carp, Sam (6 May 2022). "ATP ranking naming rights included in Pepperstone's global sponsorship deal". SportsPro. Retrieved 31 December 2022.
  11. ↑ "ATP & PIF announce multi-year strategic partnership to accelerate the growth of global tennis". ATP Tour. 21 October 2024. Retrieved 6 March 2024.
  12. ↑ Felipe, Erazo (1 June 2022). "Pepperstone Becomes a Financial Commission Member". Finance Magnates. Retrieved 14 October 2024.
  13. ↑ Oladipupo, Solomon (24 March 2023). "Pepperstone UK's Profit Surges 128% to £4.6M in 2022". Finance Magnates. Retrieved 21 October 2024.
  14. ↑ Shome, Arnab (3 April 2024). "Pepperstone's UK Profit Jumps to £10M in FY23 with a Spike in Non-Trading Revenue". Finance Magnates. Retrieved 21 October 2024.
  15. ↑ Sikder, Tareq (22 January 2024). "Pepperstone Secures Title of Official Regional Partner for AFC Asian Cup". Finance Magnates. Retrieved 21 October 2024.
  16. ↑ Chmiel, Damian (18 March 2024). "Pepperstone Scores Major Partnership with Tennis Legend, John McEnroe". Finance Magnates. Retrieved 21 October 2024.
  17. ↑ Chmiel, Damian (19 June 2024). "Pepperstone Rolls Out 24-Hour US Share CFDs Trading on Multiple Platforms". Finance Magnates. Retrieved 21 October 2024.
  18. ↑ "Pepperstone founders may be worth $300m each with listing". Australian Financial Review. 26 November 2013.
  19. ↑ Francis, Hannah (9 July 2014). "Pepperstone's unlikely millionaire". The Australian Business Review.
  20. ↑ Courtenay, Adam (26 January 2014). "Is Pepperstone headed for an IPO?". The Sydney Morning Herald.
  21. 1 2 "BaFin License". Finance Magnates. 13 August 2020. Retrieved 21 October 2024.
  22. ↑ Blystone, Dan (30 June 2024). "Pepperstone Review 2024". FXF Empire. Retrieved 21 October 2024.
  23. ↑ Jefferson, Andrew (26 August 2014). "Employer won't back down over insider trading sacking". Herald Sun.
  24. ↑ Chenery, Susan (27 September 2021). "The Accomplice". ABC Net. Retrieved 21 October 2024.
  25. ↑ Gans, Jeremy (7 June 2021). "The insiders". Insider Story. Retrieved 12 October 2024.
  26. ↑ Durkin, Patrick (11 May 2014). "Alleged insider trading case cracked through LinkedIn". The Sydney Morning Herald. Retrieved 16 December 2014.
  27. ↑ Georgia, Wilkins (4 August 2014). "Whisteblower 'fired after insider-trading tip-off'". Financial Review. Retrieved 21 October 2024.
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