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.
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 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 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]
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]
