Popular European broker Admiral Markets has been fined by the Estonian Financial Supervision and Resolution Authority (Finantsinspektsioon) for €32,000 for allegedly mishandling pricing oil contracts during last year’s negative oil futures event.
The regulator indicated that Admiral Markets “changed the conditions of financial instruments signed with clients significantly, unilaterally and without warning. The methodology used for calculating the spot price of crude oil was changed, and at the same time fees for depositing certain securities overnight were raised.”
Furthermore, “the process and grounds for the changes were not transparent to clients. Clients who held the financial instruments had to reorganize their activities as a result, including accounting for possible missed opportunities to earn income or for unplanned expenses”, explained the regulator.
This situation seems rather odd in that almost all brokers offering oil contracts on their trading platforms were forced to change trading conditions, namely the associated futures contracts of the Contracts for Difference (CFDs) offered for trading in order to avoid catastrophic losses to customers as a result of the unprecedented market movements.