Alpari discussion and help thread

[counter_violent]

Alpari (UK) Limited (in special administration) (“the Company”)
Update to Clients and Creditors– 23 January 2015
This update is in addition to information previously provided.
As previously stated, on administration, there is a pooling event under the FCA’s Client Asset rules,
which means that retail clients (“Clients”) are entitled to share on a pro-rata basis in the client money
pool. Professional clients and other creditors (“Creditors”) do not have a claim against the client
money pool but will have a claim against the other assets of the company.
The Joint Special Administrators are working closely with the Company staff to confirm all Client and
Creditor positions so that statements can be issued as soon as possible.
The pricing of trades
Following an initial review performed by the Joint Special Administrators, it appears that there have
been certain inconsistencies in the pricing of trades closed out in the period before the Joint Special
Administrators were appointed, owing to the volatility in the market after the SNB announcement at
9:30am GMT, Thursday, 15 January 2015. As a result, any account statements or information provided
by other means received by Clients and Creditors after the SNB announcement may not accurately
represent a Client’s or Creditor’s balance.
The Joint Special Administrators continue to investigate and analyse the impact of this issue as a
matter of priority and will provide a further update on their website as information becomes available.
This issue is not expected to impact clients who only held cash balances in their account at 9:30am
GMT, Thursday, 15 January 2015 and entered no subsequent trades. For this reason we expect to be
able to agree such balances more quickly than those affected by this issue.
Claims process
We will provide statements as soon as possible to clients: where there are unresolved issues this will
delay the receipt of the relevant statements.
Other creditors who are not professional clients will receive formal correspondence shortly setting
out the process for making a claim.


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I had a trade open from last october 2014, the only trade. They closed it out. Will I manage to get my money back of that only closed trade in very positive region ?

No idea , what was the trade?

 

[Lica 123]

Alpari

They closed my trade long on the swiss frac they went bust what can you say!

 

[pindol]

Please check this trade on your mt4 platform. The franc moved so much it might not have hit the stop fast enough. Did your trade have a stop Lica or did you not. As the franc moved so much if you didnt have a stop then it probably took all your money and would then close either with a negative balance or zero in your account which would be correct you would have had your trade closed automatically if this situation occurred

 

[counter_violent]

Please check this trade on your mt4 platform. The franc moved so much it might not have hit the stop fast enough. Did your trade have a stop Lica or did you not. As the franc moved so much if you didnt have a stop then it probably took all your money and would then close either with a negative balance or zero in your account which would be correct you would have had your trade closed automatically if this situation occurred

He said long swiss franc not short

 

[scitech]

No idea , what was the trade?

EURUSD from last October short

 

[counter_violent]

EURUSD from last October short

Then if I were you...I would strongly argue your case for the account balance as at date of liquidation. You may also contact the FCA and inform them that you wish to claim under the compensation scheme should you have no joy with the liquidators. Any idea what value you would place on your account ?

 

[pindol]

He said long swiss franc not short

just saw your comment counter_violent that is true i totally agree with you but i wanted lica to tell me what currency pair he was trading as CHF isnt in the major currency pairs as a first currency only second so everything is then back to front. if it was usd/chf long then its as I say so wanted a bit more info to help him thats all. Cheers for spotting this but just have a query as to the pair cross.

 

[tar]

Alpari UK Clients Will Be Required to Cover Negative Balances
- See more at: http://forexmagnates.com/alpari-uk-...cover-negative-balances/#sthash.3uVoLIK3.dpuf

 

[DT]

Under FCA regulations firms are required to segregate (ring-fence) client funds in a separate bank account away from the money which the firm uses to run their business. So basically, when a client closes a position, the profit or loss from that position is moved either in or out of the client funds account from / to the firms account. This might not happen for every trade but it will happen periodically. This means that there is always sufficient money in the client funds account to pay out every positive account balance.

no it doesn't mean that - it just means the client funds are segregated from the firm, you're not segregated from other clients - if there are significant losses from other clients then there can still be a situation where there are insufficient funds to pay everyone what they're owed

 

[stevespray]

no it doesn't mean that - it just means the client funds are segregated from the firm, you're not segregated from other clients - if there are significant losses from other clients then there can still be a situation where there are insufficient funds to pay everyone what they're owed

Technically your money may not be 'segregated from other clients' in a strict sense but the mechanics of how the firm must move money into and out of the client funds account should mean that the firm cannot take money out of the client funds account to cover the losses of clients with a negative balance. Thus the funds remaining in the client funds account should pretty much cover the positive balances of all remaining clients.

 

[DT]

Technically your money may not be 'segregated from other clients' in a strict sense but the mechanics of how the firm must move money into and out of the client funds account should mean that the firm cannot take money out of the client funds account to cover the losses of clients with a negative balance. Thus the funds remaining in the client funds account should pretty much cover the positive balances of all remaining clients.

yes you're segregated from the firm(or should be if they're acting within the rules), but that isn't the issue - the issue is where a client or multiple clients take huge losses(i.e. beyond the funds they have deposited with the firm) that they can't or won't pay - their funds are pooled with your funds and if the firm can't cover those losses then the clients as a whole can lose money while the firm collapses despite those funds being segregated from the firm itself

 

[Pferd]

I don't know the legal ins and outs but could Alpari and others have a class action against SNB for causing such losses ? Swiss law at a guess would favour the bankers, who they would probably deem more important than brokers/clients.

In my point of view there is at least a chance for lawyers to look into it, even as a criminal accusation. I am no lawyer, would like to hear the opinion of one, but I think this was borderline fraud, could be wrong though. Two days before removing the peg they were saying it was a "cornerstone" of their monetary policy. Or in other words, saying one thing and doing another for their own benefit. If that does not constitute fraud I don't know what will. But better if there is a lawyer outthere who could clarify this...?

 

[DT]

That sounds pretty ridiculous - central bankers move markets every time they take an action or make a speech... you honestly think you can sue them because they did something that you don't like. Next time there is a larger interest rate hike than expected we should get the lawyers out because in a previous speech they didn't hint/give a heads up at what they might be doing? Maybe central bankers should only perform an action if a whole bunch of analysts have predicted in advance that they're going to perform that action... The idea that you could sue them over this is just silly, they don't need to conform to people's expectations/predictions of what they should be doing nor do they need to drop a bunch of hints before they take an action. It is their bank, their currency... I mean I don't see what grounds you'd have to sue in the first place. The markets moved... so what - they always move when a central bank does something unexpected.

 

[BSD]

Believe in any case the SNB is protected by state immunity from foreign, and sovereign immunity from domestic, lawsuits.

See for example:

http://www.klgates.com/files/Public...491c-87f2-17c4ee15fbf8/State_Immunity_art.pdf

 

[Pferd]

That sounds pretty ridiculous - central bankers move markets every time they take an action or make a speech... you honestly think you can sue them because they did something that you don't like. Next time there is a larger interest rate hike than expected we should get the lawyers out because in a previous speech they didn't hint/give a heads up at what they might be doing? Maybe central bankers should only perform an action if a whole bunch of analysts have predicted in advance that they're going to perform that action... The idea that you could sue them over this is just silly, they don't need to conform to people's expectations/predictions of what they should be doing nor do they need to drop a bunch of hints before they take an action. It is their bank, their currency... I mean I don't see what grounds you'd have to sue in the first place. The markets moved... so what - they always move when a central bank does something unexpected.

1.- I did not say I dislike (or like) their movement. Neither I had an opened position in CHF at the time.

2.- I see your point, but this is completely different. I am not asking for hints or clues about what they are about to do, but certainly what I am not expecting is lies and being misled about their thinking just hours before they announce the exact opposite.

If I remember correctly, there is something about this in the Fraud Act 2006 (UK).

 

[DT]

1.- I did not say I dislike (or like) their movement. Neither I had an opened position in CHF at the time.

2.- I see your point, but this is completely different. I am not asking for hints or clues about what they are about to do, but certainly what I am not expecting is lies and being misled about their thinking just hours before they announce the exact opposite.

If I remember correctly, there is something about this in the Fraud Act 2006 (UK).

Like I said they don't have to give you a heads up or drop hints before an announcement - they can comment on their current policy right up until they decide to change it etc..etc.. If you think they can be sued for this then feel free to post the news story and tell me I'm wrong when that happens - it won't.

I don't think a UK Fraud Act is particularly relevant to a central bank in another nation.

 

[stevespray]

In my point of view there is at least a chance for lawyers to look into it, even as a criminal accusation. I am no lawyer, would like to hear the opinion of one, but I think this was borderline fraud, could be wrong though. Two days before removing the peg they were saying it was a "cornerstone" of their monetary policy. Or in other words, saying one thing and doing another for their own benefit. If that does not constitute fraud I don't know what will. But better if there is a lawyer outthere who could clarify this...?

The only people who would like this is the lawyers! Probably around five to ten years work there all at sky high rates which would ultimately lead nowhere.

Only one winner - The lawyers.

 

[Pferd]

Like I said they don't have to give you a heads up or drop hints before an announcement - they can comment on their current policy right up until they decide to change it etc..etc.. If you think they can be sued for this then feel free to post the news story and tell me I'm wrong when that happens - it won't.

I don't think a UK Fraud Act is particularly relevant to a central bank in another nation.

The reference to the UK Fraud Act was just that, a reference. Meaning that probably there are other similar laws in other countries.

I am just giving an opinion and asking if there is a lawyer who can clarify this issue further. Are you one? It seems not. You just seem interested in pontificating without bringing anything of substance to the discussion.

 

[DT]

The reference to the UK Fraud Act was just that, a reference. Meaning that probably there are other similar laws in other countries.

I am just giving an opinion and asking if there is a lawyer who can clarify this issue further. Are you one? It seems not. You just seem interested in pontificating without bringing anything of substance to the discussion.

There is no substance to the discussion in the first place, it was a silly notion to start with and that is all I'm pointing out. Yes I'm sure Switzerland has fraud legislation too and this has go absolutely nothing to do with fraud.

Have you seen any articles in the press, perhaps by lawyers/legal commentators etc.. even putting forth the opinion that there is potential for a lawsuit here? Nope, because it is just a nonsensical idea that someone has mentioned on an internet form.

You think you could sue a central bank because they took an action that conflicted with the messages they'd been giving out prior to that action... good luck with that. Like I said feel free to link back to the story when that happens...

 

[stevespray]

yes you're segregated from the firm(or should be if they're acting within the rules), but that isn't the issue - the issue is where a client or multiple clients take huge losses(i.e. beyond the funds they have deposited with the firm) that they can't or won't pay - their funds are pooled with your funds and if the firm can't cover those losses then the clients as a whole can lose money while the firm collapses despite those funds being segregated from the firm itself

I strongly suspect that it was the firms hedge position which killed them. They probably realised a long time ago that clients were simply picking off the low hanging fruit it terms of trading in line with 'the peg'. So in order to mitigate losses the firm has to hedge in line with the client base. This is all fine and dandy until the peg was removed. I suspect at that point the firm (along with several other firms by the looks) simply ended up providing liquidity (fixed spread sizes etc) in their own market which was simply not there in the underlying (which was where the firms hedge was placed.)

So maybe they ended up being stuck with their hedge position whilst some clients were able to exit their positions due to the automation of the platform (and the fact that the maximum spread is fixed)?