Case Examples

In this section we will publish a random selection of cases to assure our Members and their Clients that the disputes are being handled properly.

Customer Complaint Dated March 1, 2017

Complaint Matter

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

The Client used Fix Cent account #XXXXX for trading operations on the Forex market. Trading was carried out with only one financial instrument (USDJPY) by means of trading adviser. The adviser opens a series of Buy / Sell orders, and in case of a favorable price movement, closes them with a profit of $ 10. In case of unfavorable price movement, the adviser opens a new order of a larger volume (maximum 15 orders) and closes all orders as soon as the price turns and passes the minimum distance in a favorable direction. The incident occurred on 01.03.2017 at 06:55 (server time). At this time, the margin level on Client’s trading account fell below a critical level, causing the Client’s unprofitable positions to be forcibly liquidated by the Broker.

The Сlient assumes that the Broker had intervened in the working process of the trading advisor by closing one of the opened positions (# XXXXXX), which led to the incorrect operation of the EA and resulted in losing of the Client’s deposit. The Сlient disputes actions of the Broker and demands to restore the balance of the trading account as of 01.03.2017.

For its part, the Broker does not see any grounds for the Client’s complaint and believes that all his transactions were executed correctly, in accordance with current market prices at the time of the transaction and in accordance with the provisions of the regulatory documents. In support of its position, the Broker provided a history of ticks on the USDJPY financial instrument, as well as trading server log-files.

Complainant Broker
XXX YYY
Financial Commission Complaint #ZZZ
Complaint Raising Date Complaint Filing Date
1/03/2017 24/03/2017
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. First of all, it should be noted that according to clause 7.8 of the Client Agreement: “A Client’s order to open position is considered to be executed and a position is considered to be opened after an appropriate record has been made in the server’s log-file.”, while according to clause 7.9 of the Client Agreement:”A Client’s order to close position is considered to be executed, and a position is considered to be closed after an appropriate record has been made in the server’s log-file.” Taking into account trading server log-files provided by the Broker, no information related to the orders for closing the positions disputed by the Client was recorded.

2. In order to find out the reasons of EA’s incorrect function, the Broker requested trading terminal log-files from the Client, which contains information about all orders generated by the trading adviser. The following error was found in the trading terminal log-file provided by the Client:

18:13:44.401 Profit+ USDJPY,H1: Order 66541787 Failed to close! Error:129

It is necessary to clarify that error 129 is an ERR_INVALID_PRICE type of error. This error occurs if the adviser operates on the account with Instant Execution mode (to which the Client’s account belongs) and tries to send a request for opening or closing the order while such request contains a price significantly different from the current price in trading terminal memory.

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

4. Trading conditions on the Client’s account assume Stop Out at the level of 20%. This information is clearly indicated on the Broker’s website in the section “Types of accounts and trading conditions”. The opening of such type of account by the Client presumes his consent to accept trading conditions provided by the Broker. Thus, in the absence of trading adviser orders to close Client’s loss-making positions such positions were forcibly liquidated by the Broker due to the drop in margin level below critical. This fact is confirmed by the trading server log-files.

According to the Dispute Resolution Committee experts’ opinion, the Client should check the periodicity of updating adviser’s quotes with RefreshRates function. If the access to Bid / Ask figures is used directly within the advisor’s code, then without the RefreshRates function it may not correspond to the current market situation and may cause such an error when sending a request. It is better to update before sending any trading request or price checking. In order to optimize and reduce the load on the trading server, the Сlient’s terminal conducts a checking before sending the request and in the event of an error, 129 will not even try to send a request to MT4 server.

If the client is sure of the correctness of the data at the time of the request, then he should check his algorithms in the trading adviser. Error code 129 with 100% probability indicates that the request price differs significantly from the price in trading terminal memory. And even if the calculations are minor, a very sharp price movement in the market can provoke such an error.

Based on the above information the Dispute Resolution Committee does not find any violations from Broker’s side. The Client, in turn, always bears full responsibility for the working process of his trading adviser and sending of orders. Consequently, there are no 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 Anatoly Bulanov.

Ruled in Favor Compensation
Broker None
If you have any questions regarding this investigation, please send them to the following address info@financialcommission.org
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

14/04/2017

 

Customer Complaint Dated January 11, 2017

Complaint Matter

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

The Client used trading account #XXXXX for trading operations with CFDs on commodities.

By the time of the incident, several positions on two instruments – Lumber and Aluminium (see statement) were opened on the account. The day before the incident, an expiration of the January futures contract Lumber (LBS F7) occurred, consequently, Client’s positions opening price on that instrument was adjusted in accordance with the current March quotes of the Lumber futures contract (LBS H7). The incident on the Client’s account occurred on January 11, 2017, at 17:05 (server time). At the specified time, due to the closure of hedged LONG position on the Lumber instrument by pending Take Profit order, the margin level on the Client’s trading account fell to a critical level. As a result of the incident, all of the Client’s open positions were forcibly liquidated by the Broker (Stop Out).

The Client disagrees with Broker actions and believes that the positions on Lumber were opened and closed at non-market prices. Such conclusion comes from a comparison of the Lumber chart in the Broker’s platform with similar charts of other financial service providers. The Client considers actions of the Broker as unlawful and demands to return lost funds:

  1. For Lumber transactions – cancel transactions and return the funds in the amount of $ 37840.00;
  2. For Aluminium transactions – recover lost profit in the amount of $ 8295.00.

In turn, the Broker believes that the Client complaint does not have any grounds due to the fact that opened positions on his account were closed in accordance with the provisions of regulatory documents at actual prices at the moment of the incident. According to the Broker’s information, at the moment of the incident, the margin level on the Client’s account fell below a critical level. As documentary evidence, the Broker provided server log-files and a history of tick data on specified financial instruments.

Complainant Broker
XXX YYY
Financial Commission Complaint #ZZZ
Complaint Raising Date Complaint Filing Date
11/01/2017 13/01/2017
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 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. First of all, it should be noted, that at the moment when the Client opened positions on Lumber (both Long and Short) the underlying CFD asset for the Lumber on Broker platform was LBS F7 futures contract (delivery month – January 2017). The comparison of price data on Lumber on Broker’s platform with data from information system ESignal showed that the Client’s positions on Lumber were opened at market prices.
  1. In connection with the expiration of futures contract LBS F7, which took place on January 10, 2017, at 23:59 (server time), starting from 11/01/2017 the underlying CFD asset for Lumber was LBS H7 futures contract (delivery month – March 2017). At the time of LBS F7 futures contract expiration, an automatic correction of opening prices on Client’s locked positions took place: the adjustment of Long position was -168,221 points while the adjustment of Short position was +167,779 points. The expiration of futures contract, as well as Client’s positions correction, occurred at the time and in accordance with the terms indicated on Broker’s website (section “Calendar of expirations” and notice of positions correction in the news section on the main page of the website). The client should take this information into account when planning and execute his trading operations.
  1. As a result of adjusting the opening prices on Client’s locked positions on Lumber caused by the expiration of LBS F7 futures contract, Client’s long position on Lumber instrument was closed at the beginning of the trading session on 11/01/2017 at 17:34 (server time) by means of a pending Take Profit order at the price specified by the Client. This fact is confirmed by the server log-files provided by the Broker.
  1. The closing of Client’s locked long position on Lumber resulted in an increase in the margin level required to maintain the remaining opened unprofitable short position on Lumber. This circumstance, in turn, led to the fact that the level of margin on the Client’s trading account fell to a critical level.
  1. It should be noted that trading conditions of the Client’s account assume Stop Out at the level of 30%. This information is clearly indicated on the Broker’s website in the section “Types of accounts and trading conditions”. The opening of this type of account by the Client assumes his consent to accept the trading conditions provided by the Company.
  1. According to the Broker’s regulatory documents, it has the right to close current Client’s position (positions) without any notification and concordance in the event when the level of margin on the Client’s trading account drops below the critical (Stop Out). At the time of the incident, the margin level fell below 30%, therefore all of the Client’s opened positions were forcibly liquidated by the Broker at prices that were actual at the time of the incident. This fact is confirmed by server log-files and history of tick data on Lumber and Aluminium instruments provided by the Broker.
  1. In conclusion, it should be also noted that at the time of Lumber quotes corresponding to the new LBS H7 futures contract came in broker’s trading system, a technical malfunction appeared on the Broker’s side. As a result of the malfunction that took place on January 11, 2012, at 14:38 (server time), before the opening of the trading session on Lumber instrument, pending Take Profit order mentioned above was triggered, causing a closing of all Client’s positions by Stop Out. The Broker timely discovered an error in its trading system and liquidated the consequences of the incident. All Client’s positions were restored at 16:48 (server time), as evidenced by Broker’s server log-files.

Based on the above information the Dispute Resolution Committee does not find any violations from broker’s side, consequently, there are no 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 Anatoly Bulanov.

Ruled in Favor Compensation
Broker None
If you have any questions regarding this investigation, please send them to the following address info@financialcommission.org
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

3/02/2017

 

Customer Complaint Dated November 30, 2016

Complaint Matter

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

The Client used trading account #XXXXX for trading operations on Forex and CFD market. Having no sufficient knowledge and experience of working on the financial market, the Client used the services of an investment consultant (Broker’s employee).

By the time of the incident several long and short positions (including locked positions) were opened on several financial instruments on the Client’s trading account:

– the total volume of short positions on Aluminum – 1.40 contracts,

– the total volume of long positions on Aluminum – 1.40 contracts,

– the volume of joint position on Aluminum – 0.00 contracts;

– the total volume of short positions on Palladium – 0.50 contracts,

– the total volume of long positions on Palladium – 1.00 contracts,

– the volume of joint long position on Palladium – 0.50 contracts;

– the total volume of short positions on Platinum – 0.50 contracts,

– the total volume of long positions on Platinum – 0.50 contracts,

– the volume of joint position on Platinum – 0.00 contracts;

– the total volume of short positions on Crude Oil – 0.50 contracts,

– the total volume of long positions on Crude Oil – 0.50 contracts,

– the volume of joint position on Crude Oil – 0.00 contracts;

– the total volume of short positions on USDRUB – 340000 units of currency,

– the total volume of long positions on USDRUB – 50,000 units of base currency,

– the volume of joint short position on USDRUB – 290000 units of base currency;

– the total volume of long positions on Gold – 0.10 contracts;

– the total volume of short positions on USDJPY – 20,000 units of base currency.

The incident on the Client’s account occurred on November 30, 2016, at 16:20 (server time). At the specified time new short position on USDRUB instrument was opened on the Client’s account:

Ticket       Open Time             Type  Volume Item      Price        S / L   T / P   Close Time              Price       Swap   Profit

XXXXXX  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 # XXXXX led to a drop in margin level on the account below critical causing all Client’s opened positions to be forcibly liquidated by Stopout.

The Client claims that his deposit was lost due to deliberate actions was taken by the investment consultant. In support of his words, the Client cites the following arguments: an excessive number of opened positions, violation of elementary rules of fund management, trading instruments with a large spread, frequent use of position locking. The Client requires Broker to return his funds deposited to the trading account ($ 16,343). In support of his position, the Client provided account trading report, as well as audio recordings of telephone conversations with representatives of the Broker.

The Broker, in turn, does not see any grounds for the Client’s complaint and completely evades its responsibility for Client’s losses, as the Client was acquainted with all risks connected with trading on Forex market. Risk notification was presented to the Client in electronic form when opening a trading account.

In addition, according to the Broker, all transactions on the Client’s trading account were carried out either by the Client himself or by an investment consultant after receiving Client’s voice confirmations.

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.

With the aim to investigate the incident, Dispute Resolution Committee of the Financial Commission closely examined documentary evidence provided by the parties to the dispute. Having analyzed the materials of the complaint, the Dispute Resolution Committee concluded:

  1. As regards financial losses incurred by the Client in a series of transactions made under the guidance of an investment consultant, it should be noted that the Client should have realized the consequences and fully accept all the risks connected with any trading strategies offered by the consultant :
  • According to clause 7 of Client Agreement:

7.1.The Company will not advise the Client about the merits of a particular Order or give him any form of investment advice and the Client acknowledges that the Services do not include the provision of investment advice in Financial Instruments or the Underlying Markets or Assets.The Client alone will decide how to handle his Client Account and place Orders and take relevant decisions based on his own judgment.

7.2. The Company will not be under any duty to provide the Client with any legal, tax or other advice relating to any Transaction. The Client may wish to seek independent advice before entering into a Transaction.

  • The Client filled in the Customer Questionnaire, during the completion of this Questionnaire the Client should have assessed his financial capabilities. The Client also read and accepted Terms of Cooperation with the Company, which states: “The client will decide on his own how to act with his account, place orders and make appropriate decisions based on his own judgment. “
  • The company duly warns its customers about the risks connected with working in over-the-counter markets, including risk warning on the company’s website and in the electronic messages sent to the company’s 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 Company with license number XXX/YYY, address ZZZ. The Broker does not establish accounts to residents or passport holders of certain jurisdictions including Canada and USA.

  1. It is also necessary to note that the Client does not deny the existence of voice orders, which he gave to the investment consultant, as evidenced by the audio recordings of telephone conversations provided by the Client.
  1. Nevertheless, there is one fact that indicates the responsibility of the Broker for Client’s partial losses. In particular, the Broker in response to Dispute Resolution Committee request did not provide any comments on the transaction # XXXXX, which was executed at non-market price according to the trade report provided by the Broker. This fact calls into question the correctness of execution of the transaction # XXXXX and all subsequent transactions that took place on the Client’s account.
  1. In response to Dispute Resolution Committee request, the Broker also did not provide documentary evidence related to the above-mentioned disputed transactions (the trading server log-files and the history of tick data on USDRUB instrument).

Thus, based on the above information, the members of Dispute Resolution Committee of the Financial Commission came to the unanimous opinion that the financial results of transactions # XXXX and # YYYY should be recognized as incorrect and the transactions themselves canceled. The broker must compensate for the Customer’s losses in full ($ 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 Anatoly Bulanov.

Ruled in Favor Compensation
Client $ 9233.90
If you have any questions regarding this investigation, please send them to the following address info@financialcommission.org
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

6/03/2017

 

Customer Complaint Dated April 29, 2016

Complaint Matter

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

The Client used account #XXXXX for trading operations in the Forex and CFD markets. The incident occurred on 29.04.2016 shortly before the end of the US trading session on Friday. By the time of the incident, the client established a SHORT position in USDJPY:

27464405      29.04.2016      18:00      sell       15       usdjpy         106.894        107.453        0.000

According to the Client, he placed his Stop Loss order at 107.453 price level, however, the Take Profit order was not set, because the trade was under his full control. After a short period of time, the client’s position was closed by Stop Loss order with a slippage of several points.

The client does not agree with the actions of the Broker and believes that his position was closed at the non-market price. This follows from a comparison of USDJPY price graph in the platform of the Broker with the similar price graphs of other financial services providers.

The client considers the actions of the Broker as unfair and requires:

– to recover funds lost due to improper closing of the short position ($8469.69);

– to compensate for unrealized gains on closed position in the amount of $26150.

For its part, the Broker believes that the Client’s complaint has no ground because his order was executed at real market prices. In support of his decision, the Broker provided the investigation with the server log records and the screenshot of the 1m chart of the instrument.

In addition to the above, the Broker refers to the paragraph XX.XX of the Terms of Business, according to which “The Trading Server of the Broker is the only reliable source of quotations, by which any relationship between both Sides arising from the Customer Agreement, the Terms of Business and other documents of the Company will be governed.”

Complainant Broker
XXX YYY
Financial Commission Complaint #ZZZ
Complaint Raising Date Complaint Filing Date
29/04/2016 7/06/2016
Complaint Response:

The decision for this complaint is based on the information provided by Mr. XXX and Broker YYY. In order to investigate the incident and to make an objective decision on the complaint, the Dispute Resolution Committee of the Financial Commission closely examined the price dynamics of USDJPY in the period before and after the incident.After a comprehensive analysis of the market situation in the USDJPY instrument at the time of the incident, the Committee concluded that there were non-market prices in the quote feed of the Broker.

Thus, the Committee considers that the transaction, which resulted in a Stop Loss order execution, should be canceled. Broker must compensate the losses incurred in a transaction # 27464405 in full ($ 8469.69).

As for the customer’s requirements on partial or full reimbursement of the amount of unrealized profit, which was lost because of Broker’s misconduct, the Committee considers that this is not acceptable, because the Client did not indicate his intentions with respect to his open position, and it cannot be assumed what kind of actions he would take in relation to his position otherwise.

In addition, the Committee members consider unacceptable the restoration of the Customer’s position after a long period of time, and in connection with the inability to initiate the trade at the original price.

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 $ 8469.69
If you have any questions regarding this investigation, please send them to the following address info@financialcommission.org
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

8/07/2016

 

Customer Complaint Dated November 15, 2014

Complaint Matter

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

The client claims that Broker (Company) has made a deletion/restoration of a series of closed EURRUB transactions on his account in accordance with paragraph 9.9 and 9.22 of the «Terms of Business» with a formulation “non-market quotes”.

In client’s opinion, the Company is trying to represent these quotes as a technical failure in violation of paragraph 16.1 b of the “Client Agreement”, namely, changing trading conditions retroactively when the benefit of these terms was recorded on the client’s account.

The client admits that the Company offers more advantageous trading conditions than the competitors what allowed him to gain a profit on a high-volatility market, however, he believes that any technical failures or non-market quotes did not take place during the reporting period.

In his own defense the client provides the following arguments:

1. The case does not fall under the last condition of paragraph 10.1 of the “Terms of Business” referred to by the Company. According to the paragraph 10.1 of the “Terms of Business” non-market quotes or spike is an error quote with the following characteristics:

a) a significant price gap;

b) a price rebound in a short time period within a price gap;

c) no prior rapid price fluctuation before the spike;

d) no released macroeconomic indicators and/or corporate reports that could influence the price.

2. In client’s opinion an example of non-market quotes provided by the Company’s on its website has nothing to do with the EURRUB quotes in the reporting period.

3. The client has provided a screenshots of the tick charts on EURRUB currency pair of other companies where such high-volatility quotes were registered.

Consequently, the client demands restoration of the trading history by the time of market closing on the 7th of November 2014 or monetary reimbursement in the amount of 4742.62 USD without restoration of the trading history.

Complainant Broker
XXX YYY
Financial Commission Complaint #ZZZ
Complaint Raising Date Complaint Filing Date
15/11/2014 1/12/2014
Complaint Response:

The decision for this complaint is based on the information provided by Mr. XXX and Broker YYY and the analysis of the market situation of the EURRUB instrument in the given time period.

1) In the reported period Russian Ruble was very unstable, the market experienced increased volatility and low liquidity. In such cases any news or activities of the Central Bank or any other large participant of the market may lead to big price fluctuations;

2) The client did not change his trading strategy during the reported period and did not try to deceive the Company. According to the Company’s report it could be seen that the client has never shown an aggressive trading behavior and also, that the client has never changed his trading strategy in the similar conditions;

3) The Company should not change the trading conditions retroactively and should consider possible rate fluctuations of the RUB instruments. Closing of the profitable transactions in non-liquid time cannot be regarded as a reason to refuse client in a payment;

4) The Company has enough tools to limit its risks when trading during the hours of low liquidity, especially for instruments that are generally low liquid. In particular, to make a special set of rules for such instruments;

Based on the above information the Dispute Resolution Committee considers the client’s complaint reasonable and believes that the Company must satisfy it.

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 $ 4742.62
If you have any questions regarding this investigation, please send them to the following address info@financialcommission.org
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

Head of DRC

1/12/2014

 

Customer Complaint Dated November 17, 2015

Complaint Matter

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

The incident occurred on November 6, 2015 during the publication of Non-Farm Employment report in the US.   Prior to the incident the balance of client’s account was 13501 RUR. The client had several opened positions in EURUSD, the total volume of client’s short position in EURUSD amounted to 80000 units of base currency. Just before the publication of the report the client placed three additional Sell Stop pending orders:

146331265   06.11.2015 sell  0.20  EURUSD   1.08500 (was not executed due to lack of funds)

146330490  06.11.2015 sell  1.50  EURUSD    1.08300 (order was executed)

                       06.11.2015 sell  1.50  EURUSD   1.08000 (order was not executed)

At 13:30 GMT there was a period of increased market volatility caused by the publication of unemployment data in the United States. At the moment of publication of the report the price gap of more than 10 points has occurred on the EURUSD market.

Client claims that the broker has violated the procedure for opening pending orders caught in the price gap, what in turn led to a deficit of margin and the subsequent liquidation of his positions by Stop Out. Client believes that pending order # 146331265 should have been executed first, instead of pending order #146330490 and explains that in case of the right sequence of execution of orders the order # 146330490 would have been cancelled due to lack of funds.

Client considers broker’s actions as misconduct and demands compensation (at least the lost deposit should be restored).

Complainant Broker
XXX YYY
Financial Commission Complaint #ZZZ
Complaint Raising Date Complaint Filing Date
11/17/2015 12/04/2015
Complaint Response

The decision for this complaint is based on the information provided by Mr. XXX and Broker YYY.First of all, it should be noted, that above mentioned reaction of the market on publication of important macroeconomic data in the US is not rare and often lead to the increase in volatility,  short-term decrease in liquidity and, consequently, to price gaps and increased spread size in the instrument.

Secondly, it should be also mentioned, that Buy Stop/Sell Stop type orders by their nature do not guarantee the execution at exact price specified in them. Depending on market situation such orders can be executed either at exactly specified price or at a price that is worse than indicated in the order. Buy Stop/Sell Stop type pending order become active as soon as at least one quote in the broker’s price feed reaches the price that is specified by the client. After activation of pending order it must be executed at the first available quote in the broker’s price feed. In this particular case, client’s orders #146331265 and #146330490 got in a price gap and were activated at broker’s server simultaneously. This fact was confirmed by the server’s log-file records provided by the broker.

Thirdly, the broker does not regulate the procedure for execution of orders in the price gap. For comparison, on real Inter-Bank market in the situation similar to abovementioned it is more likely that the larger volume order would be executed first as it corresponds with the logic of market. The technology of execution of orders/transactions is structured in a way where orders/transactions of a larger volume are executed first and only afterwards the smaller volume orders/transactions could be executed at prices that remained.

Such practice of execution of pending orders does not contradict the official response of the Broker YYY received by the Client.

Based on the above information the Dispute Resolution Committee does not find any violations from broker’s side, consequently there are no 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 Anatoly Bulanov.

Ruled in Favor Compensation
Broker None
If you have any questions regarding this investigation, please send them to the following address info@financialcommission.org
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

Head of DRC

12/04/2015

 

Customer Complaint Dated January 22, 2015

Complaint Matter

Mr. XXX claims on January 15th he was stopped out of his two positions in EURCHF at prices that were inconsistent with the market. Following the SNB announcement there was extreme volatility in the swiss franc which appreciated substantially against the Euro and other currencies. Despite the sharp drop in EURCHF Mr XXX’s 2 short positions or 0.01 lots in the pair were stopped out by a ‘non market spike’ to the upside with quotes as high as 1.33 following the announcement from a level of around 1.20. Mr XXX mentions that not only was he stopped out at prices that he mentions were totally inconsistent with the market but he missed the opportunity to benefit from the large subsequent drop in prices. He contacted the broker whom initially responded and refused his proposal to be closed by actual market prices at the time which he claims were closer to 0.85 at the time. When asked by the Commission if he received any compensation from the company Mr XXX confirmed he received his ‘deposit’ back from the company.
Mr XXX is claiming his two positions be closed out at 0.85 and the reopening of his two pamm accounts (which were closed) enabling him to trade or withdraw funds.
Mr XXX provided his pamm accounts position statements and chart information.

Complainant Broker
XXX YYY
Financial Commission Complaint #ZZZ
Complaint Raising Date Complaint Filing Date
1/15/2015 1/22/2015
Complaint Response

The company’s response confirms the extreme volatility that was created at the time by the SNB announcement. They mention at the time their specialists detected a ‘spike’ topping 1.3269 on two servers which was confirmed as to price and volume by their liquidity provider. The company asserts their hedge trades were not corrected or cancelled despite their attempts to do so. Nevertheless the company proceeded to correct the MT4 charts and decided to compensate its clients the losses caused by these prices. Mr XXX‘s accounts were indemnified with Usd 85.12 and Eur 61.13. He was duly notified.

The decision for this complaint is based on the information provided by Mr XXX and Broker. Summarising all the above the Dispute Resolution Committee found in favour of Mr XXX. The committee found that the upward ‘spike’ following the announcement by the SNB was not consistent with acceptable market prices and noted the steps the company took to indemnify the client. The Committee also found that the client should receive a form of fair compensation further than that already provided to reflect his missed opportunity. The Committee recognised the technical issue the company may have had in its decision for the company to award further compensation to the client. However, the Committee does not believe that the company must be responsible for all hypothetical income that the client could possibly make based on historical data.

Ruled in Favor Compensation
Client Broker member decision
If you have any questions regarding this investigation, please send them to the following address info@financialcommission.org
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

Head of DRC

02/24/2015

 

Customer Complaint Dated November 28, 2014

Complaint Matter 

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

The client claims his positions in USDRUB were closed out (stopped out) at a price that was’ non-market’ on November 28th. The client notes that the spread expansion was asymmetrical and affecting the offered side of the market adversely impacting his short positions. Also that other ‘non market quotes’ provided by the brokerage were filtered out with the exception of the one that caused his positions to be stopped out. The client is claiming USD1,434.81 as compensation for the loss.

Complainant Broker
XXX XXX
Financial Commission Complaint #XXX
Complaint Raising Date Complaint Filing Date
11/28/2014 12/18/2014
Complaint Response

The company provided tick data for the said date when the client positions were stopped out maintaining that due to increased volatility spread increases for USDRUB occurred on several occasions that day. The company states that under normal conditions spreads are stable but the ‘dramatic’ increase in volatility caused spreads to widen from their liquidity providers which was reflected in their pricing. The company also offered the client a different choice of account with different conditions and fixed spreads.

Decision on this complaint is based on the information provided by Company and by the Client.

Summarizing all above the Dispute Resolution Committee found in favour of the client as the stop out price achieved on the day was not consistent with market prices overall despite the increased volatility.

This complaint was considered by members of the Dispute Resolution Committee  and framed by the Head of the Committee.

Ruling in favor Compensation
Client $1,434.81
If you have any questions regarding this investigation, please send them to the following address info@financialcommission.org
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

Head of DRC

01/05/2015

 

Customer Complaint Dated November 12, 2013

COMPLAINT DETAILS

After opening his trading account #XXXXX on February 14, 2013 the complainant made several funding operations using a variety of payment methods. The total amount of funds deposited by client on his trading account had reached $32143.25. On September 5, 2013 the client made a trial withdrawal of funds in the amount of $170. On November 8, 2013 the client filed his first request for withdrawal of funds in the amount of $3000. On November 11, 2013 the client filed his second request for withdrawal of funds in the amount of another $3000. The client confirms that all his withdrawal requests were sent to the broker`s back-office and his personal manager. 

The dispute situation occurred on November 12, 2013. On that day the broker has blocked the client`s trading account and closed his positions with a total loss of $25980. In justification of his actions, the broker cites the fact that the client initiated a chargeback against his funding operation dated July 8, 2013. The Broker claims that his payment counterparty notified him about the chargeback operation related to funding transaction #ZZZZZ dated July 8,2013 for the amount of $3000. The chargeback operation ARN was provided as well. The chargeback was executed on November 8,2013. 

On November 22, 2013 the client received the wire transfer in the amount of $3000 from the broker. For the period of next three months the client was trying to deal with the broker and resolve the dispute. The client insists that he did not initiate chargeback operation and provides investigation with his bank notice as confirmation. On February 25, 2013 the client withdrew remaining funds in the amount of $ 15780.15 from his trading account.

DRC DECISION

Financial Commission Complaint Response
Name of the Applicant Broker – Company
CLIENT BROKER
Complaint to Financial Commission # ХХ
Date of complaint Date of complaint submission
11/12/2013 03/14/2014
Complaint Matter

CLEINT submitted a complaint to the Financial Commission regarding the following:

Trading account number XXXXX. Starting from February 2013, the client conducted active trading activity in his account. The client used several different funding methods, including plastic cards of several banks. The total amount of the funds invested by client had reached $ 32143.25. On November 12, 2013 the broker had blocked the client`s trading account and closed his positions with a total loss of $25980. According to the broker, the reason for blocking customer’s account was  a chargeback operation, initiated by the client.

The client claims that the broker brings against him baseless accusations because he had never initiated chargeback operations. The client believes that the broker unreasonably blocked his trading account, and thus made a significant material and moral damage to him. The client requires compensation from the broker in the form of refund of the remaining part of invested funds ($ 13193.10).

Complaint Response

Decision on the complaint was made on the basis of information provided by the BROKER and the CLIENT.First of all, it should be noted that in accordance with the rules of the Financial Commission “Customer may submit a claim to the Financial Commission within 45 days of the incident.” Such restrictions are not accidental, because, in our opinion, prolonged inactivity of the parties only exacerbates the situation and complicates its fair settlement.

Second, the both parties of the dispute have enough solid evidence that there were no violations of regulations and rules of engagement for business partners. Here we are referring to the fact that:

a) the customer has provided sufficient documentary evidence of the absence of any intention to initiate a chargeback operation and thus cause material damage to his partner (broker);

b) on the other hand, we are convinced that the brokerage company also acted within the rules (para. XX and ZZ of the Customer Agreement) and blocked legitimately the trading account of the customer to learn more about the chargeback operation.

After verification of the information provided by the parties of the dispute, members of the DRC came to the unanimous opinion that this claim cannot be the subject of investigation by the Financial Commission according to para.11 (e) of the Rules of the Financial Commission.

DRC members believe that in this situation all the responsibility lies on the BROKER`s financial counterparty (CONTRACTOR), which in accordance with its security policy for any reasons beyond the control of the BROKER initiated chargeback operation.

Thus, formally speaking, this claim cannot be resolved in one’s favor. However, the general opinion of the members of the DRC, as an act of goodwill BROKER could meet some of CLIENT`s requirements for compensation of material damage. It is out of question to fully compensate the customer`s material damage, because at the moment of the incident the customer’s account was at a loss. Furthermore, because of limitation period of the incident we also cannot consider any recovery of the client`s positions.

This complaint was reviewed by the members of the Dispute Resolution Committee and was processed by the head of Committee Anatoly Bulanov.

Decision in favor of Compensation
Client At Broker’s discretion
If you have any questions regarding this complaint review, please send them to info@financialcommission.org
Confirmation
I certify that the Dispute Resolution Committee considered all information and I confirm that the decision was made fairly, impartially and without anyone’s intervention. I am sure that the information provided in the document is true.
Signature Position Date
Head of Dispute Resolution Committee 03/31/2014

 

Customer Complaint Dated February 4, 2014

COMPLAINT DETAILS

The client led simultaneous trading on three micro accounts: #XXXXX, #YYYYY and #ZZZZZ.

On each of these accounts were opened several short positions in GBPUSD. In accordance with the terms of trade established by the broker for micro accounts a client can choose the leverage from 1:1 to 500:1, but the account balance should not exceed the amount of $3000. Furthermore, in case of the account balance exceeds $3000, the leverage is being automatically reduced by 100 times.

The dispute occurred on February 14,2014 after the emergence of the free margin deficit caused by an adverse movement in price of GBPUSD. The client decided to add some money to the account in order to prevent positions liquidation (Stop Out), hoping for a favorable price movement in the near future. The client informed the broker (online support representative) about the fact and asked him to keep his account leverage ratio unchanged (500:1) because after adding money to his account the balance exceeded the limit of $3000. In response to the customer`s request the broker recommended him to reduce the balance by withdrawing a part of funds from his account. The client submitted a request to withdraw the funds but ultimately, his losing positions were closed on stop out. 

The customer is not satisfied with the brokerage company actions, because he believes that misleading terms of trade established by the broker for micro account led to his losses. 

DRC DECISION

Financial Commission Complaint Response
Complainant       Broker
CLIENT BROKER
Financial Commission Complaint #XX
Complaint Raising Date Complaint Filing Date
2/4/2014 3/1/2014
Complaint Matter

CLIENT has lodged his complaint with Financial Commission because of the following:

Simultaneous trading was conducted by the client on three micro accounts: #XXXXX, #YYYYY and #ZZZZZ. 

Several short positions in GBPUSD were opened on each account with different time intervals. Later on, due to margin deficit caused by an adverse movement in exchange rate of GBPUSD all losing positions were liquidated by the broker (Stop Out operation).

The client is not satisfied with the broker actions, and believes that “misleading terms of trade” established for micro account were the main reason of his losses. According to the client, he had no choice to save his account under such trading rules. In connection with the above, the client believes that a fair resolution of his complaint would be to require the broker to compensate his losses (about $ 7500) caused by the forced liquidation of his positions on three accounts.

Complaint Response 

Decision on this complaint is based on the information provided by BROKER and CLIENT.

In accordance with the terms of trade established by the broker for micro accounts, any client can choose the leverage from 1:1 to 500:1, but the account balance should not exceed the amount of $3000. Furthermore, in case of the account balance exceeds $3000, the maximum leverage is reduced automatically 100x (leverage ratio can vary from 1:1 to 5:1). The Stop Out level is also clearly stated on the broker`s web site (20%). The company shows all trading terms in “Terms of Trade” section on its website. Also, trading terms are communicated to the client upon account registration. By accepting these trading terms the client confirms his understanding of the margin requirements and changes in margin requirements based on trading account balance as well.

Summarizing all above, it is obvious that the broker has provided the customer with acceptable conditions for trading, despite the fact that these conditions were not the best in terms of the customer. Thus, the DRC sees no violations of the trading terms and does not find any ground for raising claims against the broker.

This complaint was considered by the members of the Dispute Resolution Committee of the Financial Commission  and framed by the head of the committee Anatoly Bulanov.

Ruling in favor Compensation
BROKER None
If you have any questions regarding this investigation, please send them to the following address info@financialcommission.org
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

Head of DRC

03/13/2014