A recent case in the United States involving Interactive Brokers reported on by Finance Feeds has highlighted the lack of meaningful dispute resolution available to both Forex traders and brokers in America. In this case the situation surrounds a customer, who incurred a significant negative balance on their account as a result of trade liquidations.
On the one hand, the customer claims that his positions were liquidated late, causing his account to drop to negative $75K, which the broker has submitted a counterclaim in an effort to recoup these funds from the customer based on the broker’s Customer Agreement. While the situation can be explained and argued by a wide variety of industry experts as to who is at fault, this situation brings to light a fundamental problem – where does the customer go if they cannot resolve a dispute with their broker?
In this case it is evident that both parties are now incurring significant legal costs in this matter, having engaged counsel and filed legal proceedings. Yet, this situation could have been avoided if both parties had access to an external or alternative dispute resolution (EDR/ADR) service, for example, our Financial Commission service.
An EDR option would have also mitigated any media attention to this matter and one would think that such a solution would be welcomed by the respondent, Interactive Brokers.
To find out more about our EDR and ADR services, send us a quick email to [email protected].