Complaint Matter

Mr. XXX has lodged his complaint with the Financial Commission on the following grounds:

The Client used account # XXX (USD) for active operations with cryptocurrencies.

The Client used account # 8809629 (USD) for active operations with Forex market instruments and CFDs. According to the Client, the specified account was registered on October 13, 2020, and funded with 7990.43 USD on December 21, 2020. On the same day, the Broker credited bonus funds in the amount of 1598 USD to the Client’s account. 

By the day of the incident, the Client established 21 Short positions with the financial instrument USOIL with a total volume of 538 lots. The incident on the Client’s account occurred on January 4, 2021, at 12:31:34 (server time). At the specified time the Broker deducted all overnight fees obtained from USOIL positions established by the Client. As a result, this circumstance led to debit of bonus funds from the Client’s account, as well as forced liquidation of the Client’s positions ## 56617870, 56617871, 56617872, 56618848, 56618862, 56623804, 56623805, 56623832, 56623833, 56623834, 56691961 due to deficit of margin (Stop Out). The number of the Client’s losses incurred by the incident totalled 6135.30 USD. Also, it should be noted that shortly after the incident the Client covered the rest of his positions in USOIL manually, at market prices, with additional losses in the amount of 1006 USD. 

The Client does not agree with the Broker’s decision (see below), accuses the Broker of misconduct and requests the Dispute Resolution Committee to check the legitimacy of the Broker’s actions in the period and after the incident. The Client believes that a fair resolution to the dispute should be compensation of financial losses incurred by the incident (7000 USD) from the Broker. The Client provided the investigation with the screenshot taken from the Broker’s platform, as well as the screenshot taken from the live chat, as documentary evidence.

In turn, the Broker does not see any grounds for the Client’s complaint, since in their opinion all Client’s positions were closed correctly, at actual market prices and in accordance with the provisions of the regulatory documents and trading rules established by the Company. The Broker provided the investigation with the trading history of the Client, the server log records, the Bonus Promotion T&C, as well as the official response to the Client on this claim, as documentary evidence. 

Complainant Broker
XXX YYY
Financial Commission Complaint #ZZZ
Complaint Raising Date Complaint Filing Date
17/01/2020 28/01/2021
Complaint response:

The decision on this complaint is based on the information provided by the brokerage company and the Client.

After a comprehensive analysis of the documentary evidence provided by the Client and the Broker the Dispute Resolution Committee of the Financial Commission has come to the following conclusions:

1. According to the information received from the Broker, they have experienced a Swap incident on USOIL positions that were incorrectly charged to their clients starting December 23, 2020. The Broker sent out client communication on January 4, 2021 prior to the actual adjustments to inform affected clients that investigation is in place and adjustments would be made shortly. On the same day, adjustments were made and client communication sent to inform affected clients. In this regard the Broker claims that they acted in full compliance with the provisions of the regulatory documents and refers to the appropriate clauses of their Client Agreement:

2.5 CHARGES AND CREDIT TO YOUR ACCOUNT

(c) If we discover that we have made an error in respect of any fee calculation, we will rectify that error

by giving you written notice within 28 days. 

3.5 ERRORS IN PRICES

Errors in pricing may occur from time to time. In these circumstances, we may adjust any element of your Position. See section 3.7 of the Product Disclosure Statement for more information about the basis on which we can do this. 

12.1 EXCLUSION OF LIABILITY

To the maximum extent permitted by law, we are not liable for: 

  1. f) any Error that may occur; 
  2. h) any error or inaccuracy in, or unsuitability of, or omission from the Agreement, or any other information provided by us, whether negligent or otherwise; 
  3. i) any Loss or Claim suffered or incurred by you in respect of our Trading Platform including due to the unavailability of the Trading Platform or Trading Platform, system and data errors, delays, inaccuracies, errors or omissions in data provided to you, software or computer viruses or the unauthorized use of the Trading Platform at any time;

2. Also, the Broker claims that the Client received their Credit Bonus under the condition that the Client’s account equity balance must not fall below credit balance, otherwise, the Credit Bonus will be removed, as outlined by the provisions of clause 16 of the Bonus Promotion Terms & Conditions:

  1. If your Account Equity balance falls below the credit balance the trading credit will be removed and your open trades will be closed. 

The Broker claims that the Swap adjustment made to the Client’s account lowered his account equity level and triggered the removal of the Credit Bonus. It was also partially due to an overnight USOIL price increase from 48.351 to 48.941, which enlarged the Client’s trading loss.

3. It should be noted that trading terms for the Client’s account suggest a floating spread and a Stop Out at 20% level. This information is clearly defined by the Broker’s regulatory documents (see Product Schedule). By opening a trading account of the selected type, the Client agreed to accept the trading terms provided by the Company. According to the Broker, at the time of the incident, the Equity/Margin ratio on the Client’s account fell below the critical 20% level. As such, due to insufficient margin, the Client’s positions ## 56617870, 56617871, 56617872, 56618848, 56618862, 56623804, 56623805, 56623832, 56623833, 56623834, 56691961 were closed automatically, at prices available on the market (Stop Out). This fact is confirmed by the records from the server log, provided by the Broker.  

4. It is quite obvious, that from a legal standpoint the Broker acted in full compliance with the provisions of their regulatory documents. At the same time, it should be noted, that from an operational perspective it does not seem that the Broker acted in a very professional way. The Broker made the error, and only after 2 weeks fixed things opportunistically without explaining to the Client or giving them the chance to deposit additional funds or reduce their position.

5. Financial Commission is committed to the best business practices accepted throughout the industry which assume that, if there is some issue caused by the broker, there shall be minimum impact on the client, and some solutions shall be provided in a swift manner to mitigate negative effects of it on the client’s positions.

Summarizing all the above the Dispute Resolution Committee has made a decision in favour of the Client. In the general opinion of the DRC members, the Broker should bear the loss of their errors, as well as communicate much more clearly and take appropriate measures in order to avoid the occurrence of such situations on their clients’ accounts in the future. Accordingly, the Broker must fully satisfy the Client’s requirement for compensation of losses in the amount of 7000 USD incurred by the incident.

This complaint was reviewed by the members of the Dispute Resolution Committee of the Financial Commission and was processed by the Head of the Committee.  

Ruled in Favor Compensation
Client 7000 USD
If you have any questions regarding this investigation, please send them to the following address [email protected]
Acknowledgement
I certify that all information was considered by the Dispute Resolution Committee of the Financial Commission and hereby confirm that the decision was made fairly, impartially and without interference. I am confident that the information provided in the document is true.
Signature Designation Date
 Anatoly Bulanov

Head of DRC

 5/03/2021

Complaint Matter

Mr. XXX has lodged his complaint with the Financial Commission on the following grounds:

The Client used account # XXX (USD) for active operations with cryptocurrencies.

By the time of the incident, several Long positions were opened on the specified trading account for the ETHUSD financial instrument, with a total volume of 8890.31 micro-lots.

The incident on the Client’s trading account occurred during the flash crash on the cryptocurrency market, on February 22, 2021, at 16:23 (server time). At the specified time, as a result of a short-term surge in the volatility of financial markets and the subsequent unfavourable change in the price of the ETHUSD financial instrument, Client’s positions ## 215349578, 

215349585, 215349594, 215349606, 215349616, 215349623, 215349629, 215349635, 215349641, 

215349653, 215349660, 215349665, 215349675, 215349680, 215349687, 215349693, 215349701,

215349710, 215349717, 215349723, 215349730, 215349737, 215349743, 215349752, 215349758, 

215349766, 215349775, 215349782, 215349787, 215349794, 215349799, 215349807, 215349812, 

215349817, 215349824, 215349831, 215349836 were forcibly liquidated by the Broker due to a shortage in margin collateral (Stop Out). As a result of the incident total amount of the Client’s financial losses totalled 7343.52 USD.

According to the Client, the loss of the deposit was a direct consequence of the incorrect operation of the trading server and the illegal actions of the Broker during the incident. The Client is convinced that the liquidation of positions on the ETHUSD financial instrument by the Broker was carried out at non-market prices. As an example, the Client cites prices on Libertex trading platform, www.investing.com platform, as well as large crypto exchanges BitMEX, Binance and other independent financial service providers, where the minimum quotes for the specified financial instrument did not fall below USD 1500 during the incident. At the same time, the quotes of the Broker using Kraken crypto exchange as a liquidity provider dropped to the level of USD 997.92. The client considers such a discrepancy in prices for the same asset to be unacceptable. In the Client opinion, the Broker should act based on the market information obtained from several sources, and not be limited to only one single source, since this limits the objectivity. The Client also notes that during the incident, due to the freezing of the Broker’s trading server, the Buy Limit pending orders did not work on the Client’s trading account, as well as displayed incorrect price information on the trading platform charts.

In connection with the above, the Client requests the Dispute Resolution Committee of the Financial Commission to verify the correctness of the Broker’s actions during the incident and the correctness of the execution of the disputed transactions ## 215349578, 215349585, 215349594, 215349606, 215349616, 215349623, 215349629, 215349635, 215349641, 215349653, 215349660, 215349665, 215349675, 215349680, 215349687, 215349693, 215349701, 215349710, 215349717, 215349723, 215349730, 215349737, 215349743, 215349752, 215349758, 215349766, 215349775, 215349782, 215349787, 215349794, 215349799, 215349807, 215349812, 215349817, 215349824, 215349831, 215349836, as well as a compensation of financial losses incurred by the incident in the amount of 7343.52 USD. As documentary evidence, the Client provided screenshots of the price dynamics of the ETHUSD financial instrument during the incident, taken from the Broker’s trading platform.

In turn, the Broker does not see any grounds for the Client’s complaint, since in their opinion all Client’s positions were closed correctly, at actual market prices and in accordance with the provisions of the regulatory documents and trading rules established by the Company. The Broker provided the investigation with the trading history of the Client, the server log records, and tick data history on ETHUSD financial instrument during the incident got from the liquidity provider

Complainant Broker
XXX YYY
Financial Commission Complaint #ZZZ
Complaint Raising Date Complaint Filing Date
22/02/2021 02/03/2021
Complaint response:

After a comprehensive analysis of the documentary evidence provided by the Client and the Broker the Dispute Resolution Committee of the Financial Commission has come to the following conclusions:

1. First of all, it should be noted that the incident on the Client’s trading account occurred against the background of massive actions of market participants to fix profits, after significant growth in the cryptocurrency market and the ETHUSD asset reached the psychologically important price level of 2000 USD on the eve of the incident. The growth of market volatility and, as a consequence, a significant decrease in its liquidity is a typical market reaction during a period of volatility. The client should understand that circumstances of this kind radically change the flow of quotes, since it often involves price gaps, widening spreads and slippage during order execution. The client should be aware that trading in such market conditions is accompanied by significant risks.

2. Secondly, according to the information received from the Broker, the quotation of the ETHUSD financial instrument, disputed by the Client, was received from the Broker’s liquidity provider – the Kraken crypto exchange. In turn, the history of tick data from Kraken indicates that during the incident, the Bid quotes (for which Long positions are closed) for the ETHUSD instrument on the specified exchange dropped to the price level of 690 USD. At the same time, on the Broker’s platform, the minimum value of Bid quotes is registered at 997.92 USD. The Broker explains the difference in the minimum quotes by the fact that his trading system uses filtering mechanisms that do not allow single quotes with serious deviations from the previous ones to enter the stream.

3. Thirdly, according to the trading conditions specified in the “Trading Conditions” section on the Company’s website, the Client’s account type assumes Stop Out at the level of 10%. At the time of the incident, the margin level on the Client’s trading account dropped below the critical level, and therefore the Broker forcibly liquidated the Client’s unprofitable positions. This fact is confirmed by the trade server log entries provided by the Broker. The Broker’s actions during the incident fully comply with the provisions of the Client Agreement:

12.1  In case the Margin Level on the Client’s trading account becomes equal or lower than the Stop Out value, the Company has the right to close all open positions on the Client’s trading account compulsory at the current market price without any preliminary notification and the Client’s consent. Stop Out values for all account types are specified in a comparison table of account types on the Company’s website.

4. Fourth, it should also be noted that the Client assumed the risk of a complete loss of funds in his trading account, under certain circumstances, since he did not use any restrictions on the amount of possible financial losses on open positions, although he could have done this, just as it was done by him in the case of restrictions on profit. For all disputed positions, the Client has placed pending Take Profit orders at the price level of 1676.23 USD.

5. Fifth, in the text of his complaint, the Client refers to technical problems with the Broker’s trading server and the freezing of his trading terminal, which allegedly took place during the incident. The client believes that this circumstance has deprived him of the opportunity to manage his trading account and monitor the price dynamics of the financial market. In addition, according to the Client, in the group of clients affected by this incident, there are allegedly 5% of accounts that survived the drawdown, although they used the same trading algorithm (EA). In this regard, the following should be noted:

  • Upon the Client’s request, the Broker analyzed the operation of the MT5 Pro server. According to the data collected, the Client did not submit any orders that were not executed on the day of the incident. Also, there were no unsuccessful attempts to enter the trading platform. A general analysis of the platform’s operation showed that hundreds of other clients have successfully logged into the platform and performed trading operations. These facts are confirmed by the server log entries provided by the Broker.
  • The fact that the accounts used “the same trading strategy” does not guarantee the same result. In addition, at the moment, the Broker does not have any data about other accounts that the Client said about, and, accordingly, the experts of the Committee have no opportunity to study and in any way comment on such situation. Moreover, there are many different factors that can lead to a similar outcome: for example, even if the same Expert Advisor works on two different accounts and sends orders with identical parameters, the trading results on these accounts may differ due to the difference in execution prices. Such differences, in turn, may occure for two identical orders sent at the same time.
  • It should be noted that orders are not executed on the data center, but on the trading server, which centrally executes orders from all accounts opened on it. Moreover, there is no targeted segmentation or division of customers by data centers. Any client can choose any available data center for connection, and the trading platform automatically selects a data center for the client with a minimum ping.
  • Limit orders ## 215349838, 215349839, 215349840, 215349842, 215349843, 215349844, 215349845, 215349846, 215349847, 215349848 of the Client, placed to open new Long positions, at lower prices, were activated at 16:23:03, i.e. at the same second when Stop Out occurred, but were immediately canceled because there was not enough free margin on the Client’s trading account to open the indicated positions. The trade server log entries provided by the Broker also confirm this fact:

2021.02.22 16:23:03.276   ‘37012959’: new account state: Assets: 0.00, Liabilities: 0.00, Equity -5118195.65, Margin: 585468.32, Free Margin: -5703663.97

2021.02.22 16:23:03.276   ‘37012959’: order #215349848 was canceled – not enough money for order activation [#215349848 buy limit 9.18518K ETHUSD at 1583.97]

2021.02.22 16:23:03.292   ‘37012959’: position stop out triggered [#215349836 buy 1.48346K ETHUSD 1631.75 tp: 1676.23] [#215397080 sell 1.48346K ETHUSD at 997.92] [997.92 / 1249.34]

  • The reason why the charts in different screenshots look different is that one screenshot was taken before the end of the 15-minute period in which this price was present, and the second was taken after the completion of the candlestick formation. This is the standard logic of charting on the MetaTrader platform.

6. Finally, it should also be mentioned that, in the Client’s opinion, the quotes of the Kraken crypto exchange are not an authoritative source, and the brokerage company is obliged to aggregate prices from different crypto exchanges and provide clients with average prices. According to the experts of the Dispute Resolution Committee, this request is not realistic, since prices on different crypto-exchanges tend to deviate significantly from each other, especially during periods of low volatility, such as the one that took place during the incident. It should also be noted that in a decentralized market, which is the FOREX market, each broker can offer its clients prices close to the real market, although slightly different from the prices of other brokers. This is normal practice, given the varying transaction volumes for each individual broker, the ever-changing market situation and some other factors.

Considering the above and taking into account the abnormal market conditions during the incident, as well as the documentary evidence provided by the Broker, the experts of the Committee, by a majority vote, decided in favour of the Broker. According to the decision taken, the actions of the Broker to forcibly liquidate Client’s unprofitable positions ## 215349578, 215349585, 215349594, 215349606, 215349616, 215349623, 215349629, 215349635, 215349641, 215349653, 215349660, 215349665, 215349675, 215349680, 215349687, 215349693, 215349701, 215349710, 215349717, 215349723, 215349730, 215349737, 215349743, 215349752, 215349758, 215349766, 215349775, 215349782, 215349787, 215349794, 215349799, 215349807, 215349812, 215349817, 215349824, 215349831, 215349836 during the incident were recognized by the experts of the Committee as correct and executed in accordance with the provisions of the Broker’s regulatory documents and the trading rules adopted by the Company. Also, according to the general opinion of the DRC experts, the Broker should notify its clients from which crypto-exchange the quotes are taken, so that such questions do not arise in the future.

Based on the above, the Dispute Resolution Committee does not see any violations on the part of the Broker and does not see any grounds for the Client’s complaint.

This complaint was reviewed by the members of the Dispute Resolution Committee of the Financial Commission and was processed by the Head of the Committee.

Ruled in Favor Compensation
Broker None
If you have any questions regarding this investigation, please send them to the following address [email protected]
Acknowledgement
I certify that all information was considered by the Dispute Resolution Committee of the Financial Commission and hereby confirm that the decision was made fairly, impartially and without interference. I am confident that the information provided in the document is true.
Signature Designation Date
 Anatoly Bulanov

Head of DRC

31/03/2021

Complaint Matter

The Client has lodged his complaint with the Financial Commission on the following grounds:

The Client used account # XXX (USD) for active trading in Binary Options. The incident on the Client’s trading account occurred on July 10, 2020, on the day when the Broker blocked the Client’s account and annulled the financial results on transactions ## 1319057826, 1324114443, 1328236807 with crypto assets, motivating their actions by the fact that on the specified account the Client used a trading strategy based on insider information, which violates the provisions of the Broker’s regulatory documents.  

The Client does not agree with the Broker’s decision (see below) and claims that he did not violate any trading rules accepted in the Company; despite this fact, the Broker decided to block the trading account and cancel the results of the disputed transactions. In the Client’s opinion, the Broker’s actions in this situation are illegal, since no objective evidence confirming the Client’s violations was presented by the Broker, and as such, there are no reasons to block the Client’s trading account.  

In connection with the above, the Client requests the Resolution Committee of the Financial Commission to verify the legality of the Broker’s actions and requires from the Broker to unblock the trading account # 63226192, as well as to return all profits received in the course of trading operations. The Client provided the investigation with the Broker’s response to this claim, as the documentary evidence.

In turn, the Broker sees no grounds for the Client’s claim and claims that the reason for blocking the Client’s trading account and cancelling the financial results on the disputed transactions ## 1319057826, 1324114443, 1328236807 was the Client’s actions that violate the provisions of the Service Agreement:

1.4.3. […] The Client will be guided by the principles of integrity, honesty, and rationality; the Client will not take actions coordinated with other Company Clients aimed at damaging the Company; the Client will not use technical features of the quote stream update on the trading terminal and will not use software errors, defects, and vulnerabilities he discovers in the trading terminal to extract income and will not distribute the information about vulnerabilities to the third parties. The Client will not use unfair and dishonest methods or ways of making trades (transactions) with the Company; the Client will not use insider or confidential information or any other information, as a result of the use of which the Client might benefit when trading with the Company and/or that might damage the Company;

In support of their position, the Broker provided the records from the database on all transactions performed by the Client, the summary information on the Client’s trading account, the screenshots with the price dynamics of the financial instrument in the disputed transactions during the incident. In addition to the above, the Broker also provided the information on the number of transactions and the corresponding trading volumes on the Binance exchange during the incident, which, in the Broker’s opinion, confirm the fact of violations of the trading rules by the Client.

Complainant Broker
XXX YYY
Financial Commission Complaint #ZZZ
Complaint Raising Date Complaint Filing Date
12/07/2020 14/07/2020
Complaint response:

After a comprehensive analysis of the documentary evidence provided by the Client and the Broker the Dispute Resolution Committee of the Financial Commission has come to the following conclusions:

1. First of all, it should be noted that according to the information provided by the Broker, the values of quotations for the financial asset Bitcoin, as well as for other cryptocurrencies, are calculated according to generally accepted methods used on the Chicago Mercantile Exchange. The Broker uses data from several major online exchanges such as GDAX, Kraken, Poloniex, Bitstamp, Bitfinex and Binance. Thus, the quotes for the Bitcoin asset, broadcast by the Broker in their trading platform, react to the slightest market changes. This information is published on the Broker’s website.

2. According to the Broker, in the period from June 6 to July 1, 2020, the Client has used unfair and dishonest methods or ways of making trades (transactions) with the Company. By the foregoing Broker means the following definition of Market Abuse, adopted in the EU countries:

Market abuse by its definition is a type of behaviour when one/several market participants are involved in trading activity that gives them an unreasonable advantage. Under the EU zone definition, market abuse consists of two aspects: insider trading and market manipulation. The latter represents itself as a trading activity aimed to encourage false or misleading impressions.

3.To justify their position, according to which the Client took actions aimed at manipulating the rate of the financial instrument Bitcoin outside the Broker’s platform, due to which he immediately received a risk-free profit on the Broker’s platform, the Broker uses analytical information obtained on the Binance Exchange trading platform. According to the Broker, being the world’s largest crypto exchange with the largest volumes of crypto transactions, transactions conducted on the Binance Exchange have the greatest impact on the quotes of crypto assets on any other sites around the world and, in particular, on the quotes of such assets, broadcast in the Broker’s platform.

4. The Resolution Committee checked to what extent the Broker’s statements regarding the fact of manipulation of the price of the specified asset for profit by the Client correspond to reality. For this purpose, the Committee examined the documentary evidence and the analytical information provided by the Broker. Based on the results of the audit, the Committee came to the following conclusions:

a) Analytical information on the number of transactions and the corresponding trading volumes on the Binance exchange during the period of the incident indicates that during the specified period, the Bitcoin market did indeed experience both an increase in the total number of transactions and a relative increase in trading volume, which might have led to a short-term change in the rate of the specified asset.

b) Information from the Order Book of client orders registered on the Binance platform during the incident, referred to by the Broker, demonstrates, in the Broker’s opinion, a lack of liquidity: 

  • 31163 USD was enough to achieve a yield of -0.01% during the lifespan of transaction # 1319057826.
  • 6828 USD was enough to achieve a yield of 0.02% during the lifespan of transaction # 1324114443.
  • 99096 USD was enough to achieve a yield of 0.02% during the lifespan of transaction # 1328236807.

с) Judging by the history of the Client’s trading operations, during the period of the incident, the Client made three short-term transactions ## 1319057826, 1324114443, 1328236807 with the financial asset Bitcoin, as a result, taking advantage of the drop/rise in the Bitcoin asset rate by

-0.01%/0.02%, the Client received a total profit of 10940 USD.

d) At the time of blocking, the status of the Client’s trading account was as follows:

  • Initial deposit 4015.01 USD,
  • Withdrawal of funds 0 USD,
  • Bonus funds 4005.01 USD,
  • Account balances 19028.46 USD (4015.01 + 4005.01 + 11008.44).

5. The Committee could not provide an adequate assessment of the Client’s trading transactions, since the Broker did not provide any documentary evidence confirming the fact that this particular Client took targeted actions to change the price of the specified financial instrument on the Binance platform or somewhere else.

6. Finally, it should also be noted that several members of the Committee recognized the Broker’s arguments as insignificant since they believe that if the Broker gives the opportunity to trade options on low liquid crypto assets, then they should understand that such assets may well make significant price movements with an amplitude of up to 10 -20% per day. If the Broker wishes to reduce the risk, then they must have a well-established risk management process in place. In the absence of it, the Broker should stop offering trading in what they consider to be illiquid assets in order to prevent their clients from exploiting the vulnerability of their infrastructure in the future.

Based on the above information, the members of the Resolution Committee came to a unanimous opinion that the Broker does not have sufficient grounds to assert that the Client’s actions on the trading platform in any way violate the provisions of the Broker’s regulatory documents. The members of the Committee believe that the Broker should recognize the financial results of the disputed transactions ## 1319057826, 1324114443, 1328236807 of the Client as legitimate and unblock his trading account.

Summarizing all the above the Dispute Resolution Committee does not see any violations on the part of the Client and believes that the Broker must fully satisfy the Client’s requirements to unblock the trading account # 63226192, with the right to withdraw the initial deposit and the accrued profit in the amount of 15023.45 USD.

This complaint was reviewed by the members of the Dispute Resolution Committee of the Financial Commission and was processed by the Head of the Committee.  

Ruled in Favor Compensation
Client 11008.44 USD 
If you have any questions regarding this investigation, please send them to the following address [email protected]
Acknowledgement
I certify that all information was considered by the Dispute Resolution Committee of the Financial Commission and hereby confirm that the decision was made fairly, impartially and without interference. I am confident that the information provided in the document is true.
Signature Designation Date
 Anatoly Bulanov

Head of DRC

09/08/2020

Complaint Matter

Mr. XXX has lodged his complaint with the Financial Commission on the following grounds:

The Client used account # 72790 for active trading in the Forex market. According to the Client, on Mar 13, 2019, he funded his trading account with 2000 EUR and started trading. After making a profit in the series of trades taken in the period from Mar 13, 2019, to Mar 14, 2019, the Client found his account blocked by the Broker for violating their T&C.

The Client claims that the Broker accused him of trading at non-market prices by utilizing price discrepancies between the quotes published by the Broker and other providers of financial services.  The Client considers the actions of the Broker as incompetent and unfair. In connection with the above, the Client requests the Dispute Resolution Committee to check the disputed transactions and requires from the Broker to return the funds in the amount of 7626.57 EUR (initial deposit 2000 EUR + profit 5626.57 EUR).  The Client provided the screenshots of his trading account as documentary evidence.

In turn, the Broker does not see any grounds for the Client’s complaint and refers to clause 19 of the Service Agreement:

  1. OUTSIDE EXECUTION SYSTEM

Non authorized Automatic or semi-automatic trading mechanism integrated by the client on the browser or client side, that does not involve human execution, will be considered back door API or system abuse that may result to an account suspension and/or position cancellation.

In support of its decision, the Broker provided the history of all transactions performed by the Client, the server log records, as well as the supporting file that shows it has access to “proper pricing” from LPs, on which it is basing its arbitraging reasoning on.

Complainant Broker
XXX YYY
Financial Commission Complaint #ZZZ
Complaint Raising Date Complaint Filing Date
14/03/2019 20/03/2019
Complaint response:

The decision on this complaint is based on the information provided by the brokerage company YYY and Mr. XXX.

After a comprehensive analysis of the documentary evidence provided by the Client and the Broker the Dispute Resolution Committee of the Financial Commission has come to the following conclusions:

  1. First of all, it should be noted that in order to make a decision on this case the DRC has analyzed the Client’s trading activity in the account # 72790 and received the following results:
  • The Client conducted his trading operations from 11:49, Mar 13 to 21:55, Mar 14 (server time);
  • The Client used major currency pairs and stock indices for trading operations;
  • After 306 transactions the Client received a total profit in the amount of 12126.34 EUR;
  • Excluding commission of 6503.05 EUR, the Client’s net profit amounted to 5624.31 EUR;
  • The share of profitable transactions performed by the Client was 76.1% or 233 transactions;
  • The duration of the Client’s profitable transactions ranged from 1 to 10 seconds.
  1. According to the Broker, during the incident that occurred in the specified period, the Client identified a technical problem on the Broker’s side and implemented a strategy (Price Latency Arbitrage) aimed at making risk-free profits at the expense of quotes lagging behind the real market or, in other words, traded at non-market (non-existent) prices.
  2. The DRC has verified the validity of the Broker’s assertion regarding the Client’s use of the vulnerabilities of its technical equipment and software for profit. For this purpose, the DRC has examined the documentary evidence provided by the Broker, as well as the history of price data on the financial instruments in the disputed transactions, obtained from independent providers of financial services. Comparison of Broker quotes provided to the Client with quotes from independent sources showed that during the incident the quotes published by the Broker were slightly behind the real market.
  3. Based on the facts listed above, in the common opinion of the DRC members, it is highly likely that the Client used special technical means (high-frequency trading EA) exploiting vulnerabilities in the Broker’s quotation system.

According to the results of voting in the framework of this case there was an equal distribution of votes between the members of the DRC (both in favor of the Broker and in favor of the Client). Thus, due to the lack of opportunity to make a unanimous decision on this case, as well as taking into account the facts listed above, the members of the DRC have decided:

  1. Not to recognize the transactions disputed by the Broker as legitimate;
  2. Consider the cancellation of the financial results of this series of transactions by the Broker as lawful;
  3. Hold the Broker liable for the following points:

a) The Company must bear the proper but limited responsibility for the occurrence of technical problems in its trading system and belated reaction in their elimination;

b) The Company must be duly responsible for the untimely notification of the Client about the revealed violations of its trading rules;

с) The Company should formulate more clearly the provisions of regulatory documents concerning price latency arbitrage. As an example, the following wording could be recommended:

You consent that the Company reserves the right to immediately terminate your access to the trading platform(s) or Account(s) or refuse or cancel any order, in the event you voluntarily and/or involuntarily partake in arbitrage unrelated to market inefficiencies, including but not limited to, latency arbitrage and swap arbitrage and/or contrary to good faith; under such circumstances, the Company may at its discretion, close any of your Account(s) and recover any losses incurred from such practices.

Based on the above, the DRC of the Financial Commission has decided that reasonable compensation should be paid to the Client. Also, according to the general opinion of the DRC members, the Broker   should provide necessary measures for timely detection of such technical problems and their elimination in the future.

This complaint was reviewed by the members of the Dispute Resolution Committee of the Financial Commission and was processed by the Head of the Committee.

Ruled in Favor Compensation
Client 2812 EUR
If you have any questions regarding this investigation, please send them to the following address [email protected]
Acknowledgement
I certify that all information was considered by the Dispute Resolution Committee of the Financial Commission and hereby confirm that the decision was made fairly, impartially and without interference. I am confident that the information provided in the document is true.
Signature Designation Date
 Anatoly Bulanov

Head of DRC

26/04/2019

Complaint Matter

Mr. XXX has lodged his complaint with the Financial Commission on the following grounds:

The Client used account # 20056027 for active trading in the Forex market. According to the Client, five positions ## 65477764, 65558331, 65675857, 65679815, 85698846 with the financial instrument EURUSD were established on the specified account before the incident (see statement).

Thus, by the time of the incident:

The incident on the Client’s account occurred on Apr 26, 2019, at 23:58 (server time), i.e. late on Friday before market closure for a weekend. Due to the deficit of margin which resulted from the expansion of the spread in the financial instrument EURUSD, all five Client’s positions were liquidated by the Broker (Stop Out). The amount of loss incurred by Stop Out totaled 1195.08 USD.

The Client claims that the size of the spread at the time of the incident was huge compared to other days at rollover, pushing his open orders to Stop Out. According to the Client, before the incident, the margin level on his account was above 100% and suddenly dropped sharply due to the spread widening. The spread was around 1.5 pips before rollover but suddenly rocketed up to 10 pips in less than 1 min. Also, the Client claims that before the incident the trend was falling and his selling orders were placed 0.49 lots more than buying orders, meaning that the account was hedged.

The Client is not satisfied with the Broker’s decision (see below) and requests the Dispute Resolution Committee to check the correctness of the execution of the transactions closed by Stop Out. The Client believes that the Broker should compensate all losses (1195.08 USD) incurred by the liquidation of positions mentioned above. The Client provided the screenshots of his trading account taken from the Broker’s mobile trading app and desktop terminal, as documental evidence.

In turn, the Broker does not see any grounds for the Client’s complaint, since in their opinion all Client’s positions were closed correctly, at real market prices and in accordance with the provisions of the regulatory documents. The Broker provided the investigation with the trading history of the Client, the server log records, as well as the history of tick data on the financial instrument EURUSD at the time of the incident, as documentary evidence.

Complainant Broker
XXX YYY
Financial Commission Complaint #ZZZ
Complaint Raising Date Complaint Filing Date
26/04/2019 18/05/2019
Complaint response:

The decision on this complaint is based on the information provided by the brokerage company YYY and Mr. XXX.

After a comprehensive analysis of the documentary evidence provided by the Client and the Broker the Dispute Resolution Committee of the Financial Commission has come to the following conclusions:

1. First of all, it should be noted that during rollover periods, in particular, during rollover before a weekend, the market very often experiences a significant decrease in liquidity combined with a significant increase in volatility. In turn, this circumstance radically changes the flow of quotations, leading to a dramatic expansion of spreads and generating price gaps. The Client should be aware that trading in such market conditions is accompanied by significant risks.

2. Secondly, the trading terms on the Client’s account suggest a floating spread and a Stop Out at the 20% level. This information is clearly defined on the Broker’s website (“Trading conditions” section). By opening a trading account of the selected type, the Client agreed to accept the trading terms provided by the Company.

3. Thirdly, according to the information provided by the Broker (the history of ticks on the financial instrument EURUSD in the period of the incident), the quotes and the size of the spread on the currency pair EURUSD the Broker received from its LP, fully correspond to what the Company gave to its clients. The quotation 1.11396/1.11496 (which was used for positions liquidation) is the product of quotation 1.11402/1.11489 received from LP and the Broker’s income in the amount of 1.4 points.

4. To ensure an objective investigation of the case the DRC requested historical price data on the financial instrument in the disputed transactions from other independent providers of financial services. Comparison of Broker quotes provided to the Client with quotes from independent sources confirmed the fact that the quotes published by the Broker at the time of the incident reflected the actual situation on the market. As such, taking into account abnormal market conditions in the period of the incident, the experts of the DRC have found the execution of all disputed transactions as correct and legitimate, since the quotes of the financial instruments published by the Broker in the period of the incident were consistent with acceptable market prices.

5. At last, at the time of the incident, the Equity/Margin ratio on the Client’s account fell below the critical level (20%). As such, due to insufficient margin, all positions were closed automatically, at prices available on the market (Stop Out). This fact is confirmed by the records from the server log provided by the Broker.

Summarizing all the above the Dispute Resolution Committee has made a decision in favor of the Broker since the Broker acted in full compliance with the provisions of the regulatory documents and the rules accepted in the Company. Accordingly, the claim of the Client for compensation of losses in the amount of 1195.08 USD was found by the members of the Committee as having no grounds.

This complaint was reviewed by the members of the Dispute Resolution Committee of the Financial Commission and was processed by the Head of the Committee.

Ruled in Favor Compensation
Broker None
If you have any questions regarding this investigation, please send them to the following address [email protected]
Acknowledgement
I certify that all information was considered by the Dispute Resolution Committee of the Financial Commission and hereby confirm that the decision was made fairly, impartially and without interference. I am confident that the information provided in the document is true.
Signature Designation Date
 Anatoly Bulanov

Head of DRC

31/05/2019

Complaint Matter

Mr. XXX has lodged his complaint with the Financial Commission on the following grounds:

The Client used account # 720170772 for active trading operations in the Forex and CFD markets. According to the Client, on Friday, September 13 a Long position on the financial instrument CL was established on the specified account. The Client set a Stop Loss order for the position at 54.38 price level. Later that day, the Client adjusted his Take Profit order to 55.38 in order to close the position at break-even, since there were no intentions to hold the position opened over the weekend. However, because of a lack of volatility, the Client’s position was not closed on Friday.

Order            Open Time               Price  Type  Lot   Symbol        S/L     T/P      Close Time

41112027  13.09.2019 15:11:08  55.36  buy   1.00       CL         54.38   55.38    16.09.2019 1:05:06

Price     Swap   P/L

55.38   -13.83  6.17

The incident on the Client’s account occurred on Monday morning, September 16, at 01:05:06 (server time) when the crude oil market opened after weekend much higher with a price gap, with the highest price registered at 61.75 level. As a result, the Client’s Long position was closed by the Broker at 55.38 per barrel, at the price indicated by the Client in their pending Take Profit order.

The Client is not satisfied with the Broker’s decision (see below) and accuses the Broker in misconduct. The Client believes that the closing price 55.38 per barrel calculated by the Company is wrong since at the time of the incident there was no such a transaction price at the whole market, the correct closing price should be at 61.43 per barrel.  In connection with the above, the Client requests the Dispute Resolution Committee to check the correctness of the execution of the disputed transaction and demands from the Broker compensation in the amount of 6050 USD, which equals to unrealized profit (61.43-55.38)*1000). The Client provided the screenshots of CL price charts taken from the Broker’s trading platform, as documentary evidence.

In turn, the Broker does not see any grounds for the Client’s complaint, since in their opinion all Client’s positions were closed correctly, in accordance with the provisions of the regulatory documents. The Broker provided the investigation with the trading history of the Client, the server log records, as well as the history of tick data on the financial instrument CL at the time of the incident, as documental evidence.

Complainant Broker
XXX YYY
Financial Commission Complaint #ZZZ
Complaint Raising Date Complaint Filing Date
16/09/2019 24/09/2019
Complaint response:

The decision on this complaint is based on the information provided by the brokerage company YYY and Mr. XXX.

After a comprehensive analysis of the documentary evidence provided by the Client and the Broker the Dispute Resolution Committee of the Financial Commission has come to the following conclusions:

1. First of all, it should be noted that during rollover periods, in particular, during weekend rollovers market very often experiences a significant decrease in liquidity combined with significant increase in volatility. In turn, this circumstance radically changes the flow of quotations, leading to dramatic expansion of spreads and generating price gaps. The Client should be aware that trading in such market conditions is accompanied by significant risks.

2. According to the information provided by the Broker (the history of ticks on the instrument) the CL market opened with 663 points price gap after the weekend rollover:

2019-09-13 23:58:58 54.80 54.86 

2019-09-16 01:05:06 61.43 61.53 

3. Despite the fact mentioned above, the Client’s disputed transaction # 41112027 was closed by the Broker at the price indicated by the Client in their pending TP order (55.38), which is confirmed by the records from the Broker’s server log. On the other hand, according to the provisions of the Broker’s regulatory documents:

1.32 Limit (Take Profit) is a type that is assigned to an Order in case such an Order is set at a price (rate) which is higher than the current market rate or to buy at a price (rate) which is lower than the current market rate. The main purpose of Limit Orders is to guarantee a Trading Operation execution at a price that is not worse than the one specified in the Order.

This information is clearly defined in the Broker’s Client Agreement (Terms and Definitions section). As such, the Broker acted in full compliance with the provisions of the regulatory documents and the rules accepted in the Company.

4. To ensure an objective investigation of the case the DRC requested historical price data on the financial instrument in the disputed transaction from other independent providers of financial services. Comparison of Broker quotes provided to the Client with quotes from independent sources confirmed the fact that the quotes published by the Broker at the time of the incident (2019-09-16 01:05:06) reflected the actual situation on the market. However, this circumstance also proves that the Client’s order execution was off market.

5. In general opinion of the DRC members, the situation when the Broker acts in full compliance with the rules accepted by the Client, but at the same time executes the Client’s TP order at price not consistent with actual market prices is not acceptable. Such execution does not correspond to the Best Execution principles adhered by the Financial Commission and contradicts to Fair Market Practices which is widely recognized in the entire financial services industry.

6. Also, it is worth to mention that the Broker has acknowledged that their regulatory documents need better wording/additional clarifications with regards to Limit Orders (TP) execution after the price gap. This fact also gives the DRC a right to demand a better decision for the Client. As such, the DRC members suggested a compromise decision according to which the Broker will have to offer partial compensation to the Client.

Summarizing all the above the Dispute Resolution Committee has made a decision in favor of the Client. According to the final decision the Broker has to offer the Client compensation either in the form of a non-withdrawable bonus in the amount of unrealized profit (6050 USD), or half of that amount (3025 USD) in the form of real funds. All profits that the Client may receive in the course of trading using a non-withdrawable bonus have to be available for withdrawal from the trading account without any restrictions.

This complaint was reviewed by the members of the Dispute Resolution Committee of the Financial Commission and was processed by the Head of the Committee.

Ruled in Favor Compensation
Client At Broker’s discretion
If you have any questions regarding this investigation, please send them to the following address [email protected]
Acknowledgement
I certify that all information was considered by the Dispute Resolution Committee of the Financial Commission and hereby confirm that the decision was made fairly, impartially and without interference. I am confident that the information provided in the document is true.
Signature Designation Date
 Anatoly Bulanov

Head of DRC

23/10/2019

Complaint Matter

Mr. XXX has lodged his complaint with the Financial Commission on the following grounds:

The Client used account # 7241004 for active trading in the Forex market. According to the Client, one pending If Done Sell Stop order with the following parameters was set on the specified account before the incident (server time):

Ticket                            Open                       Type      Vol     Item          Price           S / L          T / P

32674152        2019.04.26 11:15:00          sell         1.73    eurusd    1.11240       1.1174      1.08240

The incident on the Client’s account occurred on Apr 26, 2019, at 15:30 (server time). During the incident, there was a scheduled release of the statistical report on the US Advanced GDP (q/q). The Clients claims that immediately after the news was published, he made 5 attempts to delete the pending order; however, the order wasn’t deleted because it had been already executed at a price 1.11146 that is almost 100 micro pips (0.00100) below the activation price set in the order. Due to this reason, the trailing stop attached to the disputed Sell Stop order wasn’t activated, the market changed its direction and, as a result, the Client’s Short position was closed by the Broker at Stop Loss. The amount of loss incurred by the incident totaled 926.57 EUR:

Ticket                 Open                        Type     Vol        Item      Price      S / L      T / P

32674152 2019.04.26 11:15:00       sell       1.73      eurusd   1.11146  1.1174  1.11141

         Close                       Price        Swap    Profit

2019.04.26 17:40:35    1.1174    -6.92     -919.65

The Client claims that his pending If Done Sell Stop order was not executed by the Broker correctly since it should be deleted and not activated or activated at the price the Client set in the order. As such, the Client believes that a fair resolution of the case would be a full compensation of losses incurred by the Broker. The Client provided the screenshots with the trading terminal log records taken from his PC, as documental evidence.

In turn, the Broker does not see any grounds for the Client’s complaint, since in their opinion all Client’s positions were closed correctly, at real market prices and in accordance with the provisions of the regulatory documents. The Broker provided the investigation with the trading history of the Client, the server log records, as well as the history of tick data on the financial instrument EURUSD, as documental evidence.

Complainant Broker
XXX YYY
Financial Commission Complaint #ZZZ
Complaint Raising Date Complaint Filing Date
26/04/2019 30/05/2019
Complaint response:

The decision on this complaint is based on the information provided by the brokerage company YYY and Mr. XXX.

After a comprehensive analysis of the documentary evidence provided by the Client and the Broker the Dispute Resolution Committee of the Financial Commission has come to the following conclusions:

1. First of all, it should be noted that during the release of important economic news, such as US GDP   and many others, the market very often experiences a significant decrease in liquidity combined with a significant increase in volatility. In turn, this circumstance radically changes the flow of quotations, leading to a dramatic expansion of spreads and generating price gaps. The Client should be aware that trading in such market conditions is accompanied by significant risks.

2. Secondly, it should also be noted that a Stop order, which also includes a Buy Stop/Sell Stop order, does not guarantee the execution of the client’s orders precisely at the price specified therein. Depending on the market situation such orders can be executed either precisely at the price specified in them, or at the price worse than specified. The pending Stop order becomes active, as soon as at least one quotation in the stream of the prices quoted by the broker reaches the value of the price specified by the client.

If reveal in detail the logic of execution of a Stop order in the real market, then it will look like as follows: at the time when the market reaches the price specified in the client’s pending order, the system submits a Market order at any price available in the market (within the Depth of the Market) for the specified volume. Execution of the order, in this case, occurs according to the queue of current positions on the broker’s trading server.

3. According to the information provided by the Broker (the history of ticks on the financial instrument EURUSD and the server log records), the disputed If Done Sell Stop order # 32674152 was activated at 15:30:01.645 (server time) after the price gap and then executed at available market price:

2019.04.26 15:30:01.095;1.11335;1.11369;

2019.04.26 15:30:01.555;1.11335;1.11354;

2019.04.26 15:30:01.645;1.11211;1.11260; order was activated 

2019.04.26 15:30:01.805;1.11198;1.11220;  

2019.04.26 15:30:01.865;1.11203;1.11229;

2019.04.26 15:30:01.975;1.11200;1.11226;

2019.04.26 15:30:02.095;1.11198;1.11216;

2019.04.26 15:30:02.195;1.11198;1.11219;

2019.04.26 15:30:02.305;1.11176;1.11201;

2019.04.26 15:30:02.415;1.11160;1.11191;

2019.04.26 15:30:02.505;1.11160;1.11187;

2019.04.26 15:30:02.615;1.11146;1.11176; order was executed

On the other hand, the first attempt to delete the disputed If Done Sell Stop order # 32674152 was made by the Client at 15:30:01.722 (Server time):

2019.04.26 11:15:00.254 195.201.246.109 ‘7241004’: order sell stop 1.73 EURUSD at 1.11240 sl: 1.11740 tp: 1.08240 exp: never

2019.04.26 11:15:00.256 195.201.246.109 ‘7241004’: order #32674152, sell stop 1.73 EURUSD at 1.11240

2019.04.26 15:30:01.722 195.201.246.109 ‘7241004’: delete order #32674152, sell stop 1.73 EURUSD at 1.11240

As such, the Client’s multiple requests to cancel the disputed If Done Sell Stop order # 32674152 were not executed due to the fact that they were received after the order # 32674152 had been accepted for processing. This aspect is specified in clause 7.4 of the Client Agreement:

7.4 Just when an order leaves a queue for executing, the Client is acknowledged by the message from server “Order is in process”. The client cannot cancel the order in case it has been accepted for execution.

4. To ensure an objective investigation of the case the DRC requested historical price data on the financial instrument in the disputed transaction from other independent providers of financial services. Comparison of Broker quotes provided to the Client with quotes from independent sources confirmed the fact that the quotes published by the Broker at the time of the incident reflected the actual situation on the market. As such, taking into account abnormal market conditions in the period of the incident, the experts of the DRC have found the execution of the disputed transaction as correct and legitimate since the quotes of the financial instrument EURUSD published by the Broker in the period of the incident were consistent with acceptable market prices.

Summarizing all the above the Dispute Resolution Committee has made a decision in favor of the Broker since the Broker acted in full compliance with the provisions of the regulatory documents and the rules accepted in the Company. Accordingly, the claim of the Client for compensation of losses in the amount of 926.57 EUR was found by the members of the Committee as having no grounds.

This complaint was reviewed by the members of the Dispute Resolution Committee of the Financial Commission and was processed by the Head of the Committee.

Ruled in Favor Compensation
Broker None
If you have any questions regarding this investigation, please send them to the following address [email protected]
Acknowledgement
I certify that all information was considered by the Dispute Resolution Committee of the Financial Commission and hereby confirm that the decision was made fairly, impartially and without interference. I am confident that the information provided in the document is true.
Signature Designation Date
 Anatoly Bulanov

Head of DRC

20/05/2019

Complaint Matter

Mr. XXX has lodged his complaint with the Financial Commission on the following grounds:

The Client used account # 5002454 for active trading in the Forex market. According to the Client, four positions on two different financial instruments were established on the specified account before the incident:

29685032 2019.04.16 20:52:45 buy 0.4  nzdcad 0.9031 0.90273 0.908 2019.04.17 01:45:02  0.90035 0.96 -82.39

29685034 2019.04.16 20:54:05 buy 0.2  nzdcad 0.90307 0.90273 0.908 2019.04.17 01:45:02 0.90035 0.48 -40.74

29685036 2019.04.16 20:55:03 buy 0.1   nzdcad  0.90306 0.90273 0.908 2019.04.17 01:45:02 0.90035 0.24 -20.3

29685092 2019.04.16 21:12:06 sell 0.1   gbpnzd  1.93175 1.93       1.92 2019.04.17 01:45:02 1.93508  0.47 -22.49

The incident on the Client’s account occurred on Apr 17, 2019, at 01:45 (server time). At the time of the incident, there was a scheduled release of the statistical report on New Zealand inflation (CPI). Due to deficit of margin which resulted from an unfavorable price change in the financial instruments NZDCAD and GBPNZD, all four Client’s positions were liquidated by the Broker (Stop Out). The amount of loss incurred by Stop Out totaled 165.5 USD.

The Client claims that his pending Stop Loss orders attached to open positions and modified a few minutes before the incident were not registered by the Broker because of trading app malfunction, and as a result, all four positions remained open until they were eventually closed due to insufficient margin.

The Client is not satisfied with the Broker’s decision (see below) and requests the Dispute Resolution Committee to check the correctness of the execution of the transactions closed by Stop Out. The Client believes that the Broker should compensate all losses (165.5 USD) resulted from the liquidation of the positions mentioned above. The Client provided the screenshots of his trading account taken from the mobile trading app, as documentary evidence.

In turn, the Broker does not see any grounds for the Client’s complaint, since in their opinion all Client’s positions were closed correctly, at real market prices and in accordance with the provisions of the regulatory documents. The Broker provided the investigation with the trading history of the Client, the server log records, as well as the history of tick data on the financial instruments in the disputed transactions, as documental evidence.

Complainant Broker
XXX YYY
Financial Commission Complaint #ZZZ
Complaint Raising Date Complaint Filing Date
17/04/2019 23/04/2019
Complaint response:

The decision on this complaint is based on the information provided by the brokerage company YYY and Mr. XXX.

After a comprehensive analysis of the documentary evidence provided by the Client and the Broker the Dispute Resolution Committee of the Financial Commission has come to the following conclusions:

1. First of all, it should be noted that according to the server log records provided by the Broker, an attempt to modify the price levels of pending Stop Loss and Take Profit orders, made by the Client a few minutes before the incident, was successful:

2019.04.17 01:33:21.726 order /update 5002454 – {“ticket”:29685032,”tp”:0.908,”sl”:0.90273,”comment”:”WebTrader”,”info”:”IP : 82.132.223.89″}

2019.04.17 01:33:34.003 order /update 5002454 – {“ticket”:29685034,”tp”:0.908,”sl”:0.90273,”comment”:”WebTrader”,”info”:”IP : 82.132.223.89″}

2019.04.17 01:33:46.467 order /update 5002454 – {“ticket”:29685036,”tp”:0.908,”sl”:0.90273,”comment”:”WebTrader”,”info”:”IP : 82.132.223.89″}

2019.04.17 01:34:34.219 order /update 5002454 – {“ticket”:29685092,”tp”:1.92,”sl”:1.93,”comment”:”WebTrader”,”info”:”IP : 82.132.223.89″}

2. Secondly, it should be noted that during the release of important economic news, such as Consumer Price Index (CPI) and many others, market very often experiences a significant decrease in liquidity combined with significant increase in volatility. In turn, this circumstance radically changes the flow of quotations, leading to dramatic expansion of spreads and generating price gaps. The Client should be aware that trading in such market conditions is accompanied by significant risks.

3. Thirdly, it should also be noted that a Stop order, which also includes a Buy Stop/Sell Stop order, does not guarantee the execution of the client’s orders precisely at the price specified therein. Depending on the market situation such orders can be executed either precisely at the price specified in them, or at the price worse than specified. The pending Stop order becomes active, as soon as at least one quotation in the stream of the price quoted by the broker reaches the value of the price specified by the client. If reveal in detail the logic of execution of a Stop order in the real market, then it will look like as follows: when the market reaches the price specified in the client’s pending order, the system submits a Market order at any price available in the market (within the Depth of the Market) for the specified volume. Execution of the order, in this case, will occur according to the queue of current positions on the broker’s trading server.

4. According to the information provided by the Broker (the history of ticks on the financial instrument NZDCAD), the pending Stop Loss orders attached to Long positions ## 29685032, 29685034, 29685036 were activated at 01:45:02.071 after the price gap and executed at available market price:

2019.04.17 01:45:01.721; 0.90361; 0.90474

2019.04.17 01:45:02.071; 0.90056; 0.90190

2019.04.17 01:45:02.641; 0.90035; 0.90159

5. To ensure an objective investigation of the case the DRC requested historical price data on the financial instruments in the disputed transactions from other independent providers of financial services. Comparison of Broker quotes provided to the Client with quotes from independent sources confirmed the fact that the quotes published by the Broker at the time of the incident reflected the actual situation on the market. As such, taking into account abnormal market conditions in the period of the incident, the experts of the DRC have found the execution of all disputed transactions as correct and legitimate, since the quotes of the financial instruments published by the Broker in the period of the incident were consistent with acceptable market prices.

6. At last, the trading terms on the Client’s trading account suggest a Stop Out at 20% level. This information is clearly defined on the Broker’s website (“Trading conditions” section). By opening a trading account of the selected type, client agrees to accept the trading terms provided by the Company. At the time of the incident the Equity/Margin ratio on the Client’s account fell below the critical level (20%). As such, due to insufficient margin, all unprofitable positions were closed automatically, at prices available on the market (Stop Out). This fact is confirmed by the records from the server log provided by the Broker.

Summarizing all the above the Dispute Resolution Committee has made a decision in favor of the Broker, since the Broker acted in full compliance with the provisions of the regulatory documents and the rules accepted in the Company. Accordingly, the claim of the Client for compensation of losses in the amount of 165.5 USD was found by the members of the Committee as having no grounds.

This complaint was reviewed by the members of the Dispute Resolution Committee of the Financial Commission and was processed by the Head of the Committee.

Ruled in Favor Compensation
Broker None
If you have any questions regarding this investigation, please send them to the following address [email protected]
Acknowledgement
I certify that all information was considered by the Dispute Resolution Committee of the Financial Commission and hereby confirm that the decision was made fairly, impartially and without interference. I am confident that the information provided in the document is true.
Signature Designation Date
 Anatoly Bulanov

Head of DRC

13/05/2019

Complaint Matter

Mr. XXX has lodged his complaint with the Financial Commission on the following grounds:

The Client used account # XXX for active trading in the Forex market. A number of Short positions with the financial instrument AUDUSD were taken by the Client on the specified account before the incident (see statement). The Client had his pending Stop Loss order established on 0.70444 price level. The volume of aggregate Short position taken by the Client was 950 lots (95000000 AUD).

The incident on the Client’s account occurred on Monday, July 1, 2019, at 00:00:36 (server time), i.e. seconds after market open after a weekend. Due to the deficit of margin which resulted from the expansion of the spread in the financial instrument AUDUSD, the majority of Client’s positions were liquidated by the Broker (Stop Out). The amount of loss incurred by Stop Out totaled 66060.01 USD.

The Client claims that the quote 0.70516 at which a part of his Short positions was liquidated never existed in the period of the incident. The quotes range was from 0.7026 to 0.7035 and the Bid price at the time of liquidation was 0.70268. In Client’s opinion, the Broker has widened the spread intentionally up to 24.8 pips (0.00248) in order to liquidate the Client’s positions. The Client claims that he searched a lot of brokers and banks and didn’t find any spreads like the one offered by the Broker.

The Client is not satisfied with the Broker’s decision (see below) and requests the Dispute Resolution Committee to check the correctness of the execution of the transactions closed by Stop Out. The Client believes that the Broker should compensate all losses (66060.01 USD) incurred by the liquidation of positions. The Client provided the screenshot of his trading account taken from the Broker’s mobile trading app, as documentary evidence.

In turn, the Broker does not see any grounds for the Client’s complaint, since in their opinion all Client’s positions were closed correctly, at real market prices and in accordance with the provisions of the regulatory documents. The Broker provided the investigation with the Client’s trading history, the server log records, the fix log records, as well as the history of tick data on the financial instrument AUDUSD at the time of the incident, as documental evidence.

Complainant Broker
XXX YYY
Financial Commission Complaint #ZZZ
Complaint Raising Date Complaint Filing Date
01/07/2019 03/07/2019
Complaint response:

The decision on this complaint is based on the information provided by the brokerage company YYY and Mr. XXX.

After a comprehensive analysis of the documentary evidence provided by the Client and the Broker the Dispute Resolution Committee of the Financial Commission has come to the following conclusions:

1. First of all, it should be noted that during rollover periods, in particular, during weekend rollovers, market very often experiences a significant decrease in liquidity combined with significant increase in volatility. In turn, this circumstance radically changes the flow of quotations, leading to a dramatic expansion of spreads and generating price gaps. The Client should be aware that trading in such market conditions is accompanied by significant risks.

2. Secondly, according to the information provided by the Broker (the history of ticks on the financial instrument AUDUSD in the period of the incident), the quotes and the size of the spread on the currency pair AUDUSD the Broker received from their LPs, fully correspond to what the Company offered to its clients. The quotation 0.70268/0.70516 (which was used for positions liquidation) is the product of quotation received from LP and the Broker’s income (mark-up) in the amount of 6 pips (0.0006).  The Broker claims that at 21:00:36.024 UTC a Stop Out was triggered on the Client’s account. After that the situation developed as follows:

  • All Client’s orders were sent for closure, but due to very thin liquidity at the opening of the market, only a part of them was executed (## 1509763411, 1509763437, 1509763438, 1509763440, 1509765028, 1509765029, 1509765030, 1509765033, 1509765101, 1509765112, 1509765123, 1509765551, 1509765558, 1509765559, 1509765573, 1509765731, 1509765737, 1509765742, 1509765747).
  • The rest of the orders returned to the Client’s account, where the account status has already changed after a number of trades were closed. This was the reason why the system did not re-send the rest of the Client’s transactions for execution of a Stop Out. However, the price still satisfied the conditions for execution of the Stop Loss order and liquidity was enough to close three more positions (## 1509769282, 1509769287, 1509769292).
  • Then the price changed and ceased to satisfy the conditions for execution of the Stop Loss, so all other positions remained in the market and were closed by the Client few hours later (## 1509769277, 1509769279, 1509769284, 1509769285, 1509769288, 1509769293, 1509769295, 1509769399, 1509769278, 1509769278, 1509769281, 1509769283, 1509769286, 1509769289, 1509769290, 1509769291, 1509769294, 1509774775).

3. To ensure an objective investigation of the case the DRC requested historical price data on the financial instrument in the disputed transactions from other independent providers of financial services. Comparison of Broker’s quotes offered to the Client with the quotes received from other independent sources confirmed the fact that the quotes published by the Broker at the time of the incident (21:00:36.024 UTC) reflected the actual situation on the market. As such, taking into account the abnormal market conditions in the period of the incident, the experts of the DRC have found the execution the disputed transactions ## 1509763411, 1509763437, 1509763438, 1509763440, 1509765028, 1509765029, 1509765030, 1509765033, 1509765101, 1509765112, 1509765123, 1509765551, 1509765558, 1509765559, 1509765573, 1509765731, 1509765737, 1509765742, 1509765747 as correct and legitimate, since the quotes of the financial instrument AUDUSD published by the Broker in the period of the incident were consistent with acceptable market prices.

4. The trading terms on the Client’s account suggest a floating spread and a Stop Out at 30% level. This information is clearly defined on the Broker’s website (“Trading conditions” section). By opening a trading account of the selected type, the Client agreed to accept the trading terms provided by the Company. At the time of the incident the Equity/Margin ratio on the Client’s account fell below the critical level (30%). As such, due to insufficient margin, the disputed transactions ## 1509763411, 1509763437, 1509763438, 1509763440, 1509765028, 1509765029, 1509765030, 1509765033, 1509765101, 1509765112, 1509765123, 1509765551, 1509765558, 1509765559, 1509765573, 1509765731, 1509765737, 1509765742, 1509765747 were closed automatically, at prices available on the market (Stop Out). This fact is confirmed by the records from the server log and fix log provided by the Broker.

5. As for the disputed transactions ## 1509769282, 1509769287, 1509769292 (which, according to the Broker were returned to the Client’s account and afterwards were closed by Stop Loss, since the price satisfied the conditions for execution of Stop Loss and liquidity was enough to close those orders), in general opinion of the DRC members, the financial results (-32562.86 USD) received by the Client on these three disputed orders should be cancelled by the Broker. Experts of the DRC have come to such a conclusion after comparison of the Broker’s quotes offered to the Client with the quotes received from other reliable sources.  At the time of the incident (21:01:04 UTC), the quotes on the financial instrument AUDUSD in the Broker’s quote feed differed significantly from the quotes received from other independent providers of financial services and, as such, did not reflect the actual situation on the market.

Summarizing all the above the Dispute Resolution Committee has made a decision in favor of the Client.

In accordance with the decision of the DRC, the Broker has to cancel the financial results on the disputed transactions ## 1509769282, 1509769287, 1509769292, and partially satisfy the Client’s requirements for   compensation (66060.01 – 32562.86 = 33497.15 USD).

This complaint was reviewed by the members of the Dispute Resolution Committee of the Financial Commission and was processed by the Head of the Committee.

Ruled in Favor Compensation
Client 33497.15 USD
If you have any questions regarding this investigation, please send them to the following address [email protected]
Acknowledgement
I certify that all information was considered by the Dispute Resolution Committee of the Financial Commission and hereby confirm that the decision was made fairly, impartially and without interference. I am confident that the information provided in the document is true.
Signature Designation Date
 Anatoly Bulanov

Head of DRC

08/08/2019

Complaint Matter

Mr. XXXX has lodged his complaint with the Financial Commission on the following grounds:

The Client used account # XXXX (USD) for active trading in Binary Options. The Client claims that he has lost all his funds (1018 USD) due to poor execution of transactions by the Broker. Also, the Client accuses the Broker in misconduct and  points to a number of irregularities in the Broker’s trading platform:

  1. Manipulation of the time parameters of the option (opening/expiry);
  2. Manipulation of the price parameters of the option (opening/expiry);
  3. Violation of the obligations declared in the Service Agreement in case of early sale of an option;
  4. The inconsistency of the current quotes on the financial instrument and the current time in two different trading platforms offered by the Broker (Binary Options/FOREX).

In connection with the above, the Client requests the Dispute Resolution Committee to investigate all unfair actions of the Broker and check the correctness of the execution of the disputed transactions (including ## 623645929, 623679962, 623684545, 624195317, 624979849, 625000743, 629517635). The Client believes that a fair resolution on the case would be to require from the Broker to return the funds in the amount of 1018 USD lost in the period of trading on the Broker’s platform. The Client provided the investigation with the history of ticks on the financial instruments in the disputed transactions, as well as the screenshots of some disputed transactions (graphs and trade specifications), which were made after the incident in the Broker’s platform, as documental evidence.

In turn, the Broker does not see any grounds for the Client’s complaint, as in his opinion all Client’s transactions were executed correctly, at real market prices. In support of his position, the Broker provided the history of tick data on the financial instruments in the disputed transactions, the history of all transactions performed by the Client, as well as the history of transactions with the financial instrument GBPUSD performed by other clients, as an example proving the Broker’s commitment to declared obligations in case of early sale of an option.

Complainant Broker
XXX YYY
Financial Commission Complaint #ZZZ
Complaint Raising Date Complaint Filing Date
08/10/2018 17/10/2018
Complaint response:

The decision on this complaint is based on the information provided by Mr. XXX and the brokerage company YYY.

After a comprehensive analysis of the documentary evidence provided by the Client and the Broker the Dispute Resolution Committee of the Financial Commission has come to the following conclusions:

1. In his claim, the Client indicates the absence of accurate information (in milliseconds) regarding the time of the option opening during its lifespan in the trading platform of the Broker. This information appears only after expiration of an option or after an early sale of an option by the Client. According to the Client, this circumstance provides an opportunity for the Broker to manipulate the time parameters of the option and, as a result, the financial result of the transaction. The Client believes that the Broker is choosing the best price for them at the time of opening and closing the trade. So if the position is Short, they would choose the minimum price around the opening timestamp and the maximum price around the closing timestamp.

The experts of the DRC have found this statement of the Client worthy of attention. In their common opinion, in some cases the Client does have a valid point that the Broker chooses the worst price.

2. Also, in his claim, the Client often refers to an independent provider of financial services used for verifying the quality of transactions’ execution (execution verification software Verify My Trade) and claims that both the quotes and timestamp that the Broker publishes on his website in the appropriate section do not guarantee the Broker’s good faith and honesty, because when executing clients’ transactions, the Broker manipulates these parameters. Nevertheless, to ensure an objective investigation of the case, the DRC requested historical data on the financial instruments in the disputed transactions from other independent providers of financial services (Tradefora, Trade Proofer and Verify My Trade). The Client’s complaint was accepted by the Financial Commission on 17/10/2018. Thus, in accordance with the Financial Commission’s rules, all Client’s transactions executed no later than 45 days from 17/10/2018 were accepted for analysis in terms of the execution quality. Verification of price feeds from other sources has not identified any significant deviations in the Broker’s prices.

It should be noted, that Client complains of being fractions of a pip off the market in several cases. Unfortunately, Verify My Trade or other similar systems are not going to show anything other than “fair execution”.

3. As for the violation of the obligations declared in the Service Agreement by the Broker in case of early sale of an option mentioned by the Client in his claim, it is worth noting the following:

  • It is important to note that an early sale of an option is the Company’s right, not an obligation. If the conditions for this kind of operation are not appropriate, the early sale of an option will be low-priced or absent at all.  In this case, the Broker refers to paragraph 4.3. of the Terms of business:

4.3. An early closing of a trade can be made before the option expiry time at the Client’s request only if the Company has the technical capability to do so and there is a stable internet connection between the Client’s trading terminal and the Company service.

  •  Also it should be noted that at the request of DRC, the Broker provided a history of trading operations performed on trading accounts of other clients with some examples of early sale of an option on the financial instrument GBPUSD with a return of 40, 50, 60 and even 80% of the transaction amount. The experts of the DRC considered this information sufficient to confirm the Broker’s commitment to its obligations.
  • With regards to the size of the payout in case of an early sale of the option, it should be noted that the Broker’s method of calculating the value of an option that is out of money, using the Black–Scholes equation, which is well-known in the financial industry, is fair, according to DRC experts’ common opinion.

4. Finally, with regards to the discrepancy between the current price of the financial instrument and the current time in two trading platforms offered by the Broker (Binary Options/Forex), which the Client mentions, the following should be noted:

  • The Broker does provide its clients with two different financial products: Binary Options and Forex. For trading, the Company offers its customers two completely different trading platforms. The quotes published on different trading platforms may vary by several reasons. This is associated with different liquidity/quote providers and with a different method of pricing. However, the trend of price behavior on the charts of different trading platforms should not differ significantly.
  • An attempt to simulate such a situation in which the time on the charts in two different trading platforms offered by the Broker would differ by 1 second was not successful.  On the other hand, this fact can be explained by low quality of Internet connection or other technical issues on the Client’s side.

Summarizing all the above the experts of the DRC have made the following decision:

  1. The Financial Commission recommends the Broker to update his Terms and Conditions and to make clearer the following (additions to the Terms and Conditions):
  • Explain that the markets they offering are OTC markets and are based on their own price aggregation.  External execution verification software cannot be used as a default measure of execution validation.
  • Price that will be used to determine the opening and closing prices will be the latest price on record prior to the order being received from the client.
  • In case of an early sale of an option, the client can receive up to 60% of the invested amount back to the account contingent to the instrument and the current market volatility.
  1. The Broker has to take the appropriate measures in order to display the exact time of the opening of the option in their trading platform.  Also, if the Broker wants to be more transparent he has to show all the quotes he had on Clients’ trades and publicly share the trade feed ticks.
  2. The Client does not have sufficient grounds to assert that the disputed transactions (including ## 623645929, 623679962, 623684545, 624195317, 624979849, 625000743, 629517635) were executed by the Broker at non-market prices. As such, the claim of the Client for compensation in the amount of 1018 USD was found by the members of the Committee as having no grounds. Nevertheless, the DRC recommends that the Broker pays partial compensation to the Client in the form of bonus, as a gesture of goodwill, thus showing him gratitude for revealing the areas of improvement in the Broker’s trading evironment.

This complaint was reviewed by the members of the Dispute Resolution Committee of the Financial Commission and was processed by the Head of the Committee.

Ruled in Favor Compensation
Client At Broker’s discretion
If you have any questions regarding this investigation, please send them to the following address [email protected]
Acknowledgement
I certify that all information was considered by the Dispute Resolution Committee of the Financial Commission and hereby confirm that the decision was made fairly, impartially and without interference. I am confident that the information provided in the document is true.
Signature Designation Date
 Anatoly Bulanov

Head of DRC

31/12/2018

Complaint Matter

Mrs. XXXXXX has lodged her complaint with the Financial Commission on the following grounds:

The Client used account # 2100064231 for active trading operations in the FOREX market. The incident occurred on January 26, 2018 at 00:01:57 (server time). By the time of the incident several positions in GBPUSD were established by the Client on the specified account:

Ticket Open Time             Type Volume Item Price S/L T/P Close time Price Swap Profit
17417482 2018.01.19 13:35:35 sell   0.2 GBPUSD 1.38711 0 1.38681 2018.01.26 00:01:57 1.41508 -0.99 -559.4
17441405 2018.01.23 06:11:12 sell   0.2 GBPUSD 1.39785 0 1.38681 2018.01.26 00:01:57 1.41508 -0.71 -344.6
17521949 2018.01.25 16:32:56 buy 1.5 GBPUSD 1.43084 0 0 2018.01.26 00:01:57 1.41508 -10.5 -2 662.5
17534988 2018.01.25 22:32:54 sell   1.1 GBPUSD 1.41333 0 0 2018.01.26 00:01:57 1.41508 -0.78 -192.5

 

Thus, by the time of the incident:

According to the Client, before the incident she cancelled T/P and S/L orders in order to manage her positions manually, since the president Trump’s speech was scheduled later that day.  However, after some time she discovered that her trading platform lost connection with the server. She contacted two representatives of the Broker’s via Facebook chat but didn’t get any useful advice or help from them. Market experienced a round of high volatility after the president Trump started to deliver his speech. This, in turn, caused widening of the spread in the financial instrument GBPUSD. As a result, all Client’s positions were liquidated by the Broker due to deficit of margin (Stop Out).

The Client believes that all losses on her trading account were incurred by the technical update of the server on Broker’s side. Client claims that she was unable to connect to the server and failed to manage her open positions as well as establish new hedge positions for the period of two hours.    

In connection with the above, the Client requests the Dispute Resolution Committee of the Financial Commission to investigate the incident and believes that the Broker should compensate all losses ($3772) incurred from the technical issue mentioned above. The Client provided the screenshots of the frozen terminal taken at the time of the incident, the records from the terminal logs taken from two different PCs, as well as the screenshots of Facebook chat, as documentary evidence.

For his part, the Broker does not see any grounds for the Client’s complaint, as in his opinion, all Client’s positions were closed correctly, at real market prices and in accordance with the provisions of the regulatory documents. The Broker claims that no upgrades were released during market hours on January 25-26, 2018 and the Client was served as honestly and professionally as always, however information provided by the Client contains some accusations towards the company that are based on non-existent and distorted factual circumstances presented in the complaint.

Because this case involved specific trades conducted by the client, the complaint was classified as a “trade-related” dispute. Unfortunately, the DRC was unable to receive necessary server logs and other information from the Broker to conduct a thorough analysis of the trades in question.

As such, the DRC had to rely on all factual and documentary evidence provided by both broker and client to issue a decision and was not able to independently verify pricing and tick data. Given the abundance of evidence of a technical malfunction on the Broker’s trading server and the reluctance of the Broker to provide additional information from their execution venue for review of trade executions, the DRC issued a decision in the client’s favor in full.

Complainant Broker
XXX YYY
Financial Commission Complaint #ZZZ
Complaint Raising Date Complaint Filing Date
26/01/2018 29/01/2018
Complaint response:

The decision on this complaint is based on the information provided by Mrs. XXXXXX and the brokerage company XXXXX.

After a comprehensive analysis of the documentary evidence provided by the Client and  the Broker the Dispute Resolution Committee of the Financial Commission has come to the following conclusions:

  1. First, it should be noted that the Client has provided significant evidence of system failure. The records from two different terminal logs, as well as screenshots of the frozen trading platform provided by the Client, show the same technical problem – multiple failed trials of the Client to connect to the server.
  2. Also, it should be noted, that the Broker refused to provide server logs which can show whether the XXX server was running at the time of the incident or not. Server logs contain not only the trading operations but also various service records, which make it possible to understand that the trading server was turned on and worked normally. These logs were not provided to DRC members for review.
  3. Taking into account the documentary evidence provided by the Client (screenshots from Facebook), the experts of the DRC have come to the conclusion that at the time of the incident the Client was trying to contact Broker’s representatives in order to resolve the problem with her trading account. In turn, the Broker’s staff had a good opportunity to explain to the Client that there are alternative ways to close positions but refused to do so.

Summarizing all the above the Dispute Resolution Committee ruled in favor of the Client. Members of the Committee believe that canceling the financial results of the disputed transactions is a fair decision in this case. Accordingly, the Broker should compensate the losses of the Client in the amount of $3772.

This complaint was reviewed by the members of the Dispute Resolution Committee of the Financial Commission and was processed by the Head of the Committee.

Ruled in Favor Compensation
Client 3772.00 USD
If you have any questions regarding this investigation, please send them to the following address [email protected]
Acknowledgement
I certify that all information was considered by the Dispute Resolution Committee of the Financial Commission and hereby confirm that the decision was made fairly, impartially and without interference. I am confident that the information provided in the document is true.
Signature Designation Date
 Anatoly Bulanov

Head of DRC

March 7th 2018

Complaint Matter

Mr. XXX has lodged his complaint with the Financial Commission on the following grounds:

The Client used account #XXXXX for active trading in Binary Options. The incident on the Client’s account occurred on May 11, 2018. On that day the Broker refused to execute the withdrawal application submitted by the Client and blocked all funds in the amount of 1724.84 USD on his trading account. The Broker accuses the Client in violation of the Service Agreement for trading on non-market prices. In turn, the Client claims that he has been trading with the Broker for several months using the same strategy and considers the actions of the Broker as unfair.

In connection with the above, the Client requests the Dispute Resolution Committee to check the correctness of execution of the disputed transactions and release the funds in the amount 1724.84 USD for withdrawal.

In turn, the Broker does not see any grounds for the Client’s complaint and claims that after performing an audit of all Client’s transactions, the Company came to the conclusion that the Client was trading on the platform solely on non-market quotes. According to the Broker, all large transactions opened by the Client at 00: 00: XX on May 2, May 1 and earlier in April were executed on non-market prices. In support of his decision, the Broker provided the history of transactions performed by the Client (with a number of disputed transactions highlighted by the Broker), as well as the screenshots of two disputed transactions (## 443230214, 453677578), taken from www.tradeproofer.com, as documentary evidence.

In this particular case, the DRC one again classified the complaint as a “trade-related dispute” and as such conducted a price and execution analysis of the trades. The results identified trades that were executed under normal market conditions with prices comparable to independent execution venues but also identified trades that were executed at “off-market” rates.

As such, the decision, in this case, was made in favor of the client, but partially, since there were some trades identified as “off-market” in the investigation phase of the resolution process that, in the opinion of the DRC, do not warrant a return of trade results back to the customer.

Complainant Broker
XXX YYY
Financial Commission Complaint #ZZZ
Complaint Raising Date Complaint Filing Date
14/05/2018 15/05/2018
Complaint response:

The decision on this complaint is based on the information provided by the brokerage company and Mr. XXXXX.

After a comprehensive analysis of the documentary evidence provided by the Client and the Broker the Dispute Resolution Committee of the Financial Commission has come to the following conclusions:

  1. First of all, it should be noted that in order to make a decision on this case, the DRC conducted a thorough analysis of the Client’s trading activity on account # XXXXXX. To ensure an objective investigation of the case the DRC requested historical data on the financial instruments in the disputed transactions from other independent providers of financial services.
  2. Verification of price feeds from other brokerage companies confirmed the fact that the majority of all large transactions opened by the Client at 00: 00: XX on May 2, May 1 and earlier in April were executed at real market prices.
  3. Also, significant deviations in the Broker’s quote feed were registered at the time of execution of the following transactions: ## 435806744, 435806766, 435806981, 443231124, 443230049, 443230006, 443232420, 443230214, 453677578, 453677530, 455609306, 455609281, 455609345, 455609378, 455609391. This confirms the fact that a number of transactions performed by the Client at 00: 00: XX on May 2, May 1 and earlier in April were executed at non-market prices, since the quotes published by the Broker at the moment of execution of these transactions were non-consistent with acceptable market prices.

Summarizing all the above the DRC has made a decision in favor of the Client. The members of the DRC have not found any evidence proving the fact that the Client somehow violated any provisions of the Service Agreement, and as such, should be allowed to withdraw his funds without any restrictions. However, the DRC has found sufficient evidence proving the fact that the disputed transactions ## 435806744, 435806766, 435806981, 443230049, 443230006, 443232420, 443230214, 453677578, 453677530, 455609306, 455609281, 455609345, 455609378, 455609391 were executed at non-market prices, and as such, the financial results of these transactions (profit in the amount of 427.17 USD) should be canceled by the Broker.

This complaint was reviewed by the members of the Dispute Resolution Committee of the Financial Commission and was processed by the Head of the Committee.

Ruled in Favor Compensation
Client 1297.67 USD
If you have any questions regarding this investigation, please send them to the following address [email protected]
Acknowledgement
I certify that all information was considered by the Dispute Resolution Committee of the Financial Commission and hereby confirm that the decision was made fairly, impartially and without interference. I am confident that the information provided in the document is true.
Signature Designation Date
 Anatoly Bulanov

Head of DRC

June 8th 2018

Complaint Matter

Mr. XXX has lodged his complaint with the Financial Commission on the following grounds:

The Client used trading account #XXXXX for trading operations on the Binary Options market.

The incident on the client’s trading account occurred on March 14th, 2018. At the time of the incident, between 00:10:03 and 00:13:21 (server time) the client opened several positions on the currency pair GBPCHF (12 positions at 4,000 rubles in size and 1 position at 5,100 rubles in size). Further, according to the client, the trading platform experienced a technical issue, during which the price charts for GBPCHF stopped moving on the trading platform, after which a message appeared “trading in GBPCHF has been stopped due to technical reasons”. As a result, all 13 open positions were closed by the broker and resulted in a material loss. It is the client’s opinion that the prices displayed for GBPCHF on the trading platform at the time of the incident were “off-market” rates that significantly differ from the prices available at other trade execution venues.

Considering the above, the client has asked the Dispute Resolution Committee (DRC) of the Financial Commission to check the validity of the trade executions on the client’s account and is demanding a compensation from their broker in the amount of 84,960 rubles (account balance of 53,100 rubles + unrealized profit in the amount of 31,860 rubles), which were lost as a result of the executed trades on the broker’s platform. The client provided documentary evidence to the DRC in the form of written communications with the broker, screenshots of their trading platform during the technical malfunction, historical rates for GBPCHF pair taken from the trading platform of finam.ru, as well as screenshots of GBPCHF price charts taken from the website investing.com.

For its part, the Broker decided that it would be a fair decision in this particular case to cancel all the trades conducted by the client on the trading platform on March 14th, 2018. As such, all trade results were annulled by the Broker.

In studying the facts of the case the DRC determined this to be a “trade-related dispute”. Trade disputes are related directly to the process of trading on the markets and include the execution of orders, margin requirement calculations, commission and trade cost calculations, trade liquidations and other situations directly related to placing trades on the Forex, CFD, and Binary Options markets.  

As such, the Committee conducted a thorough review of the client’s trades, the execution prices and the prices available at other independent execution venues. As a result, the DRC found that the broker unnecessarily annulled the results of all trades and determined which specific trades were executed under normal market conditions.

It is with this determination that the DRC ruled partially in the customer’s favor – to restore the P/L from transactions that executed in normal market conditions.

Complainant Broker
XXX YYY
Financial Commission Complaint #ZZZ
Complaint Raising Date Complaint Filing Date
14/03/2018 22/03/2018
Complaint response:

The decision for this complaint is based on the information provided by the Client and the Broker.

To ensure an objective investigation of the incident, the Dispute Resolution Committee (DRC) of the Financial Commission closely examined the documentary evidence provided by the parties to the dispute. Having analyzed the materials of the complaint, the Dispute Resolution Committee has come to the following conclusions:

The disputed transactions on GBPCHF were analyzed by the DRC to ensure that trades were executed at real market prices. To conduct this unbiased analysis the DRC received historical price data from several independent execution venues. The analysis of the tick price data showed:

  1. Transactions ## 413830671, 413830688 should not be challenged, since they were executed and closed at reasonable, live market rates.
  2. Transactions ## 413830720, 413830756 should not be challenged, since they were executed at reasonable, live market rates and even though they were closed at rates that signaled a technical error was about to occur, since the closing price did not affect the material outcome of the trade.
  3. All further transactions and trading results (## 413831298, 413831304, 413831316, 413831322, 413831354, 413831367, 413831374, 413831458, 413831710, 413831718, 413832271, 413832294, 413832319) should be annulled because they were opened and closed at “off-market” rates according to the DRC’s analysis.

Taking into account the above-mentioned trade execution analysis, the DRC is of the opinion that the Broker should reinstate the trading results (P/L) for transactions ## 413830671, 413830688, 413830720, 413830756 and compensate the client 9,600 rubles, which equals the amount of profit/loss resulting from these transactions.

This complaint was reviewed by the members of the Dispute Resolution Committee of the Financial Commission and was processed by the Head of the Committee.

Ruled in Favor Compensation
Client 9,600 rubles
If you have any questions regarding this investigation, please send them to the following address [email protected]
Acknowledgement
I certify that all information was considered by the Dispute Resolution Committee of the Financial Commission and hereby confirm that the decision was made fairly, impartially and without interference. I am confident that the information provided in the document is true.
Signature Designation Date
 Anatoly Bulanov

Head of DRC

April 6th 2018

Complaint Matter

Ms. XXX has lodged his complaint with Financial Commission on the following grounds:

The Client used trading account #XXXXX for trading operations on the Forex and CFD market. Having had little to no experience trading the markets, the Client used the services of an investment consultant (a representative of the broker XXXX).

At the time of the alleged incident described in the complaint the Client held open positions LONG and SHORT (including hedged positions) in several financial instruments:

-sum of SHORT position size on Aluminium equal to 1.40 contracts,

-sum of LONG position size on Aluminium equal to 1.40 contracts,

-NET position size on Aluminium equal to 0.00 contracts;

– sum of SHORT position size on  Palladium equal to 0.50 contracts,

– sum of LONG position size on Palladium equal to 1.00 contracts,

– NET position size on Palladium equal to 0.50 contracts;

– sum of SHORT position size on Platinum equal to 0.50 contracts,

– sum of LONG position size on Platinum equal to 0.50 contracts,

– NET position size on Platinum equal to 0.00 contracts;

– sum of SHORT position size on Crude Oil equal to 0.50 contracts,

– sum of LONG position size on Crude Oil equal to 0.50 contracts,

– NET position size on Crude Oil equal to 0.00 contracts;

– sum of SHORT position size on USDRUB equal to 340000 of base currency,

– sum of LONG position size on USDRUB equal to 50000 of base currency,

– NET position size on USDRUB equal to 290000 of base currency;

– sum of LONG position size on Gold equal to 0.10 contracts;

-sum of SHORT position size on USDJPY equal to 20000 of base currency.

The incident occured on the Client’s account on November 30th, 2017 at 16:20 (trading server time). At this time a new SHORT position was established in the account on the USDRUB currency pair:

 

Ticket Open time Type Volume Item Price S/L T/P Close time Price Swap Profit
1483737 30.11.2016 16:20 sell 3.00 usdrub 63.4520 0.00 0.00 30.11.2016 16:20 65.4491 0.00 -9 154.14

 

The opening of the order #1483737 led to the decrease in margin on the account to a critical level and, as a result led to the liquidation of all open positions on the account by the Broker (Stop Out).

The Client states that she believes her trading account deposit was lost due to the deliberate actions of the investment consultant. In supporting this conclusion the Client argues that the investment consultant: opened too many trades, did not employ simple rules of equity management, placed trades in products with high spreads, frequent use of hedging in trading. The Client is requesting the Broker to return funds in the amount of $16343 that were deposit in the trading account. The documentary evidence provided by the Client includes a trading account statement for account #XXXXXX, as well as audio recordings of conversations with a representative of Broker YYYYY.

The Broker believes the Client’s complaint is not justified and does not take any responsibility for the losses incurred on the Clients’ account, because, as stated by the Broker, the Client was made aware of all risks involved in trading leveraged products on the financial market. The appropriate risk disclosures were provided to the Client in electronic format during the account opening process.

Moreover, the Broker indicated that all trades conducted on the Client’s account were made either directly by the Client or by the investment consultant after receiving verbal confirmation from the Client.

Following the Dispute Resolution Committee’s decision in the case, the Broker did not satisfy the DRC’s decision to compensate the client within 28 days, according to the Rules and Guidelines of the Financial Commission.

Because the Broker failed to satisfy the decision, the Commission took emergency action to assist the Client and invoked the use of the Compensation Fund to compensate the Client for their losses identified in the DRC decision. As a result, the Client was awarded the maximum amount of $5000 from the Compensation Fund, as the Broker was a Category B member.

Furthermore, the Commission took action and expelled the Broker’s membership with the Financial Commission.

Complainant Broker
XXX YYY
Financial Commission Complaint #ZZZ
Complaint Raising Date Complaint Filing Date
30/11/2016 11/01/2017
Complaint response:

The decision for this complaint is based on the information provided by the Client and the Broker.

To ensure an objective investigation of the incident, the Dispute Resolution Committee (DRC) of the Financial Commission closely examined the documentary evidence provided by the parties to the dispute. Having analyzed the materials of the complaint, the Dispute Resolution Committee has come to the following conclusions:

  1. With regards to the financial losses incurred by the Client due to the trading conducted by the investment consultant it is necessary to note that the Client should have been aware of all the risk associated with using or not using any trading strategy provided by the investment consultant:
  • According to section 7 of the Customer Agreement

7.1 The Company does not consult the Client on the benefits of any specific trade order or otherwise provide any other consulting regarding investments, and the Client agrees that the services do not include investment consultations on financial instruments, base markets or equity. The Client makes trading decisions exclusively of their own accord, including to place trading orders.

7.2 The Company is not required to provide any legal, tax or other advise associated with any trades. If the Client wishes, they can consult with an independent party on such matters before executing a trade.

  • The Client completed a Client questionnaire and in doing so should have evaluated their risk tolerance and also provided an acknowledgement that they accept the Terms of service with the Company that states that “the Client shall decide how to manage their account, place orders and make decisions of their own fruition.”
  • The Company takes adequate steps to provide risk warnings to customers that can result in trading non-exchange traded products, including risk warnings displayed on the Company website and electronic messages addresses to clients:

Risk Warning: Trading leveraged products such as CFD’s involves substantial risk of loss and may not be suitable for all investors. Trading such products is risky and you may lose all of your invested capital. Please click here to read full Risk Disclosure. Safekeeping and Brokerage services are provided by XXXX. with license number YYYY, address in ZZZZ. XXXX does not establish accounts to residents or passport holders of certain jurisdictions including Canada and USA.

  1. It is also important to point out that the Client is not disputing the any verbal instructions that she gave to the investment consultant for conducting trades on her account. This is confirmed by audio recordings provided by the client.

 

  1. Nonetheless, there is one instance which points to the responsibility of the Broker for partial losses incurred on the Client’s account. In particular, the Broker could not provide the Dispute Resolution Committee comments on trade #XXXXXX, which, according to the account statements provided by the Broker was closed at an off market rate (i.e. without the spread amount of 2 RUB). This fact puts into question the validity of trade  #XXXXXX and all other subsequent trades in the account (including trade #ZZZZZ), which led to the liquidation of positions on the account and subsequent losses.

 

  1. In response to its questions the DRC did not receive in a timely matter other evidence requested from the Broker, including trading server logs indicating tick pricing on the USDRUB currency pair at the time of the incident.

As such, having reviewed all the facts and circumstances of the dispute, the DRC has come to unanimous agreement that trades #XXXXX and ZZZZZZ) conducted on trading account #XXXXX should be deemed invalid and the results of these trades annulled. Given this determination, the Broker must compensate the Client for losses incurred with trades #XXXXX and #ZZZZZZ in the sum of $9233.90.

This complaint was reviewed by the members of the Dispute Resolution Committee of the Financial Commission and was processed by the Head of the Committee.

Ruled in Favor Compensation
Client $9233.90
If you have any questions regarding this investigation, please send them to the following address [email protected]
Acknowledgement
I certify that all information was considered by the Dispute Resolution Committee of the Financial Commission and hereby confirm that the decision was made fairly, impartially and without interference. I am confident that the information provided in the document is true.
Signature Designation Date
 Anatoly Bulanov

Head of DRC

March 6th 2017

 

Complaint Matter

Ms. XXX has lodged his complaint with Financial Commission on the following grounds:

The Client used trading account #XXXXX for trading operations on the Forex and CFD market. Having had little to no experience trading the markets, the Client used the services of an investment consultant (a representative of the broker XXXX).

The Client states that she believes her trading account deposit was lost due to the deliberate actions of the investment consultant. In the words of the Client in the beginning of the process of working with the consultant, the Client did not conduct any self-directed trades as they relied on the consultant to place trades on her behalf in the trading account using a remote access program called TeamViewer. After the trading account lost considerable equity (approximately $2000) the client was introduced to another investment consultant of the Broker, who conducted a series of trades with metals contracts, as instructed by the Client herself. As a result, the subsequent trades in the account led to the Client losing her full initial deposit amount.

The Client is requesting the Broker to return funds in the amount of the initial deposit less $150, which was withdrawn from the account on December 13th 2016 ($2082). The documentary evidence provided by the Client includes a trading account statement for account #XXXXXX, as well as screenshot of an electronic message from the investment consultant with instructions on downloading the TeamViewer program.

The Broker believes the Client’s complaint is not justified and does not take any responsibility for the losses incurred on the Clients’ account, because, as stated by the Broker, the Client was made aware of all risks involved in trading leveraged products on the financial market. The appropriate risk disclosures were provided to the Client in electronic format during the account opening process.

Moreover, the Broker indicated that all trades conducted on the Client’s account were made either directly by the Client or by the investment consultant after receiving verbal confirmation from the Client.

Following the Dispute Resolution Committee’s decision in the case, the Broker did not satisfy the DRC’s decision to compensate the client within 28 days, according to the Rules and Guidelines of the Financial Commission.

Because the Broker failed to satisfy the decision, the Commission took emergency action to assist the Client and invoked the use of the Compensation Fund to compensate the Client for their losses identified in the DRC decision. As a result, the Client was awarded $2082 from the Compensation Fund.

Furthermore, the Commission took action and expelled the Broker’s membership with the Financial Commission

 

Complainant Broker
XXX YYY
Financial Commission Complaint #ZZZ
Complaint Raising Date Complaint Filing Date
16/12/2016 04/01/2017
Complaint response:

The decision for this complaint is based on the information provided by the Client and the Broker.

To ensure an objective investigation of the incident, the Dispute Resolution Committee of the Financial Commission closely examined the documentary evidence provided by the parties to the dispute. Having analyzed the materials of the complaint, the Dispute Resolution Committee has come to the following conclusions:

  1. With regards to the financial losses incurred by the Client due to the trading conducted by the investment consultant it is necessary to note that the Client should have been aware of all the risk associated with using or not using any trading strategy provided by the investment consultant:
  • According to section 7 of the Customer Agreement

7.1 The Company does not consult the Client on the benefits of any specific trade order or otherwise provide any other consulting regarding investments, and the Client agrees that the services do not include investment consultations on financial instruments, base markets or equity. The Client makes trading decisions exclusively of their own accord, including to place trading orders.

7.2 The Company is not required to provide any legal, tax or other advise associated with any trades. If the Client wishes, they can consult with an independent party on such matters before executing a trade.

  • The Client completed a Client questionnaire and in doing so should have evaluated their risk tolerance and also provided an acknowledgement that they accept the Terms of service with the Company that states that “the Client shall decide how to manage their account, place orders and make decisions of their own fruition.”
  • The Company takes adequate steps to provide risk warnings to customers that can result in trading non-exchange traded products, including risk warnings displayed on the Company website and electronic messages addresses to clients:

Risk Warning: Trading leveraged products such as CFD’s involves substantial risk of loss and may not be suitable for all investors. Trading such products is risky and you may lose all of your invested capital. Please click here to read full Risk Disclosure. Safekeeping and Brokerage services are provided by XXXX. with license number YYYY, address in ZZZZ. XXXX does not establish accounts to residents or passport holders of certain jurisdictions including Canada and USA.

  1. On the other hand, the Client states that they never agreed to allow the first investment consultant to place trades on her account, verbally or otherwise. In this regard it is important to note that the broker did not provide the Dispute Resolution Committee (DRC) evidence of audio recordings with the Client in a timely manner as set out in the Membership Rules and Guidelines. Thus no evidence was provided indicating that the Client gave verbal agreement to the investment consultant to conduct trades on her account. This puts into question the Broker’s statement regarding the full responsibility of the Client for all the trades conducted in the account.

As such, having reviewed all the facts and circumstances of the dispute, the DRC has come to unanimous agreement that all the trades conducted on trading account #XXXXX should be deemed invalid. Given this determination, the Broker must compensate the Client for all losses incurred on the account in the sum of $2082.

This complaint was reviewed by the members of the Dispute Resolution Committee of the Financial Commission and was processed by the Head of the Committee.

Ruled in Favor Compensation
Client $ 2082
If you have any questions regarding this investigation, please send them to the following address [email protected]
Acknowledgement
I certify that all information was considered by the Dispute Resolution Committee of the Financial Commission and hereby confirm that the decision was made fairly, impartially and without interference. I am confident that the information provided in the document is true.
Signature Designation Date
 Anatoly Bulanov

Head of DRC

March 7th 2017