The Australian financial services regulator is looking into licensing concerns relating to Fulham’s new sponsor, Titan Capital Markets, and the firm’s website has been blocked to view from the UK and US.
Fulham’s Supporters’ Trust has called for greater due diligence around the signing of future deals in light of the Titan partnership but has seen its request to be represented on an ethics committee rejected.
In September, Fulham announced they had made an agreement with the Australian-based company Titan Capital Markets to become their Contracts for Difference (CFD) trading partner for the remainder of the 2022-23 season.
A CFD trading firm speculates on the underlying price of an asset — such as shares, commodities or foreign exchange markets.
Titan Capital Markets states on its website that it is an “integrated, educational, financial group”, combining financial education courses and trading programmes from which they take a commission.
However, a series of concerns have emerged about the company, including over potential breaches of the licences it operates under and potentially misleading claims about its licensing status. On Thursday, the company’s website was blocked to viewers in the UK, the US and Australia.
Fulham’s press release marking the deal stated Titan Capital Markets’ official charity, the Titan Foundation, will cooperate with the Fulham Football Club Foundation, the club’s charitable arm, to provide support for underserved children and families in education, health and human services.
How that will happen in practice is not clear, however. An Instagram post for the Titan Foundation appeared only on October 6 after The Athletic asked about the charity and there is no reference to them on the company’s website.
The Fulham Supporters’ Trust met with club representatives on Wednesday.
The Trust’s chair, Tom Greatrex, said: “It is not at all surprising that Fulham supporters are concerned about how our club found themselves in this position of an agreement with this company which would involve Fulham players as content creators, and corporate social responsibility via a foundation — particularly as Titan appear to have blocked access to their website from the UK within the last 24 hours.
“The Trust suggested that the club should form an ethics committee to approve future potential agreements… The club rejected that suggestion. We understand that there is a sponsorship committee in the US. The fact this partnership agreement was approved, announced and publicised suggests that oversight could also be improved.
“It would be refreshing if the club could simply acknowledge they got this wrong and put in place an approach which would minimise the possibility of something similar happening again in the future.”
Fulham say they do not comment or provide further information in regards to its commercial partnership deals.
Why is Titan Capital Markets being looked at?
Titan Capital Markets does not possess an Australian Financial Services licence as stated on its website but instead is an authorised representative of another company, Wholesale Investors. This allows it to operate as a CFD trading platform but only permits it to make offers for wholesale clients, not for retail clients — in other words, clients who are not professional or sufficiently experienced for investment business. Titan Capital Markets’ marketing material, however, suggests that its business is largely based on educating those with little experience.
The Australian Securities and Investment Commission, which regulates AFS licences, is concerned by this offering of services to non-business clients and is looking into whether this contravenes the rules of the licence is it acting under.
Titan Capital Markets also states that it possesses a Money Services Business (MSB) licence in Canada, which is registered under the company Titan Global Capital Markets. However, according to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), “a registration with FINTRAC does not indicate an endorsement or licensing of the business”.
These points were put to Titan Capital Markets by The Athletic, which did not respond.
Are there other red flags?
Titan Capital Markets offers guaranteed returns that are difficult to achieve. For its Firefox Trading Team, it guaranteed returns of 14 per cent up until Thursday October 13, when its website was updated and the claims were removed.
The same page also cited strong returns being made in January and February 2022.
The company’s website, though, was not created until March 31, 2022, and the company was only incorporated in Australia on March 28, 2022.
Another concern lies with the company’s structure. A Titan Capital Markets presentation to potential clients suggests it is not just a CFD trading firm offering financial training packages with a complex, tiered reward scheme, but also potentially a multi-level marketing scheme, with membership fees and rewards based on recruiting new members.
Questions about Titan’s statements and what it appears to do in practice were first raised by journalist Martin Calladine, author of Fit and Proper People, on his blog, the Ugly Game.
“There are three or four things that in any normal situation would make me concerned about it,” he says. “But the first one, the overwhelming one, is the rates of guaranteed returns that they’re offering. You shouldn’t need to go any further.
“It appears to be a (multi-level marketing) MLM (firm), rather than a CFD trading platform. An MLM is a way of structuring a business. While they have a bad reputation, they are not in fact, illegal.”
Recruitment to join Titan Capital Markets appears to focus overseas. It has limited social media presence, other than an Instagram account and a series of YouTube videos uploaded in the past two months that are not directly linked to a company account.
But it does have an open Telegram channel, a type of messaging service. Within that, online seminars are advertised for countries mainly in Africa and South East Asia, from where the company’s website is still available to view. Titan has held in-person “leader seminars” in Ghana, Togo and Cameroon.
It is difficult to establish the background of senior staff. In an online video, titled “Titan Capital Markets Board of Directors”, it cites several key names including Michael James, chief investment officer; Scott Gibson, chief technology officer; Klaus Huber, executive chairman; Anthony Jefferson, head trader; Emmanuel Peterson, head trader, and Howard Yan, CEO.
Yan was pictured at Craven Cottage for the unveiling of the agreement with Fulham and is filmed receiving an award in Dubai in September as well as having a website.
But other than Peterson’s LinkedIn and Yan’s website, it is hard to establish background details.
“There’s almost zero digital footprint of the senior staff,” says Calladine.
On company documents filed in Australia, only one person is listed as a shareholder, and that person, Hongnang Zhang, does not appear in the above video about Titan Capital Markets.
Huber, who is cited as executive chairman in the video, is the sole shareholder of the company, while Yan, Peterson, Jefferson, James and Gibson do not feature. Huber is listed as a director of Titan Global Capital Markets, the company that is registered as a Money Business Service in Canada and whose MBS number is cited on the Titan Capital Markets website.
FINTRAC said: “A registration with FINTRAC does not indicate an endorsement or licensing of the business. Rather, it indicates only that the business has fulfilled its legal requirement under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to register with the federal government.
“FINTRAC does not issue regulatory licenses to MSBs or any other businesses subject to the Act. In Canada, the licensing authority falls under provincial and territorial jurisdiction.”
What does Titan Capital Markets gain from its agreement with Fulham?
Titan Capital Markets’ brand will be visible on the club’s perimeter LED boards at matches, which are beamed across the world during Premier League matches. The company will have access to Fulham’s players for content creation, according to Fulham’s statement.
Speaking at the WikiFX awards in Dubai in September, head trader Peterson was asked about their agreement with Fulham. He said: “It actually brought us greater brand awareness. It adds more credibility to our brand. We’re a company with a lot of financial resources and assets. We can afford to strike partnerships with prominent sports clubs.
“It’s not only Fulham, the partnership with Fulham allows us to expand our reach. Later we will go into golf, NBA, we’re eyeing F1 clubs. But that’s in the future. We have the resources. We will expand our brand exponentially. It shows us that we are not just one of those companies that comes and goes. We want to be here for many years.”
Why are clubs making these types of agreements?
Fulham already have gambling firm W88 as their principal partner and shirt sponsor. Gambling sponsors are pervasive throughout English football and W88 has sponsored Wolverhampton Wanderers, Aston Villa and Crystal Palace. W88 accesses the UK market through a ‘white label’ arrangement, which means the site is operated through someone other than the brand owner.
Financial pressures are tight. In Fulham’s case, commercial and matchday revenue falls a long way behind some of their rivals. Their latest accounts detailed losses of £93million ($103.1m) during the 2020-21 season, which included work on their Riverside Stand development. From sponsorship, they recouped £11million, which is below comparable rivals like Crystal Palace (£16million) and a world away from the best teams in the division, such as Arsenal (£142million).
In order to try to compete in the transfer market, and to comply with financial fair play regulations that limit owner investment, they have to reduce their overall losses by increasing revenue. That means high-value agreements become more appealing. In the case of W88.com, Fulham said the deal was a “club record” for their principal kit sponsor.
Fulham are not alone in receiving criticism for sponsorship decisions. Norwich City, for example, ended an agreement with obscure Asian gambling company BK8 after they used highly sexualised images of young women in social media promotions.
“It is a systemic problem, with all clubs in the top few divisions massively under pressure financially, especially after COVID-19,” suggests Calladine.
“We’ve seen it pretty widely across football and it needs to be addressed at a much higher level because clubs have no incentive, other than the occasional embarrassment, to try and correct it.
“Action needs to be taken on a much higher level. Fulham deserve a lot of criticism but they are, I think, a symptom of a much wider and bigger problem.”
“Across football, clubs seek to generate revenue from partnership and sponsorship agreements,” added Greatrex, “including with companies whose target audience is overseas and not necessarily football supporters. There is nothing wrong with that. But, given the reputational risks involved, there should be some due diligence applied to potential sponsors and partners.
“We understand that Fulham do undertake due diligence — and other potential partners have not progressed as a result — but it seems to us that either the checks are not thorough enough, or they weren’t applied in this case.”
Titan Capital Markets and Wholesale Investors have been contacted for comment.
(Top photo: Visionhaus/Getty Images)