Capital Spreads fraudulently changed the prices of trade executed 2 weeks ago!!!!!!!!

[shortsell]

Regulated Exchanges bust trades from time to time - SP companies should be held to the same standard - If the SB prices were out of line with the underlying market then they are also going to bust them... you can whinge all you like but it's a fact of life - the FOS,FSA,FBI will have no interest in this - if you dont understand the music get off the dance floor!

what a great post.

 

[PipStar]

Now the problem which the various SB Co's have is this... In order to void a trade they have to show that acceptance never occured. As you can see this is difficult for them to prove given that most firms issue contract notes upon acceptance. More importantly, the firms actually admit that the errors are spotted after the event (after acceptance) and as such this would, in law, be an admission that they were considering the terms of an already formed contract after the event when the law makes it perfectly clear that 'consideration' must be carried out prior to 'acceptance'.
My point with the various sets of T&Cs is... most of them appear to try and circumvent the clearly established method of the formation of a contract.

You are right on this point of law and as you say this type of situation as happened to the thread starter almost never ends up in court. So I expect this will be settled at Capital Spreads expense since they made the error in the first place.

It is too late for Capital Spreads to void the trade after 2 weeks. If this was a USA broker, they have only 15 minutes to void a trade as per National Futures Association (NFA) rules. This rule was introduced in the USA over a year ago to prevent a similar situation like this one happening.

 

[tomorton]

A contract condition is only enforcable if you can enforce it. The best that can be hoped in a situation like this is to convince the company you are intent on enforcing the condition and get them to agree to void all relevant trades and restore the account balance, all to a level as if none of the trades ever happened.

As far as FSA, FO etc. are concerned, I can't believe they will take action to help here but contacting them and using their names and good offices might reinforce the arguiment with the company and bring them to settle.

If we ever hear the end of this, I am sure that a reputable firm would just void all the disputed trades (as we have seen before).

 

[tar]

If we ever hear the end of this, I am sure that a reputable firm would just void all the disputed trades (as we have seen before).

As i understand , Capitalspreads did void the bets , dont know why his account incurred a negative balance , maybe he lost some of the profits he made before CS took action , he is not giving us the full details ...

 

[tomorton]

You're certainly right about the last part, tar.

 

[hacks]

Regulation 5(1) of The Unfair Terms in Consumer Contracts Regulations 1999 states that:

A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer.

If the manifest error terms of the contract only protect the spreadbetting company and not the consumer, then those terms maybe unfair.

 

[Mata Nui]

As i understand , Capitalspreads did void the bets , dont know why his account incurred a negative balance , maybe he lost some of the profits he made before CS took action , he is not giving us the full details ...

I think poster mentioned withdrawing some cash. I guess once the trades were reversed that would take him negative. eg if you start with 1k then make 2k profit and withdraw that 2k when that 2k is reversed you are going to be -1k. I aksed him this in about the 3rd post or so but he didnt reply. Whatever the truth is i completely agree we dont seem to be getting the full story. For all we know he may even be up in cash terms and its now just CS chasing him for the cash.

 

[brettus]

Regulation 5(1) of The Unfair Terms in Consumer Contracts Regulations 1999 states that:



If the manifest error terms of the contract only protect the spreadbetting company and not the consumer, then those terms maybe unfair.

Yea, but it can go either way. There might have been clients stopped out because of this. The only thing i think he could argue is that his closing trade was done at a fair price, so why are they reversing that trade? Obviously he should only say that if it's in his favour.

Everything is in the T&C's. Spreadbetting companies have the right to do pretty much what they want, and if you agree to it then there's not much you can do. That's why they make so much money.

 

[PipStar]

Everything is in the T&C's. Spreadbetting companies have the right to do pretty much what they want, and if you agree to it then there's not much you can do. That's why they make so much money.

They do what they want because no one has enough money to take them to court or the amount in dispute is not worth hiring a lawyer.

 

[GumRai]

I would guess that the OP was totally aware of the mistake in the price quoted at the time of the trade and was taking advantage of it. Just unlucky that he didn't get away with it.
If they only cancelled winning trades and left the losers in place, he may have a case for having those trades cancelled also.

As far as I know, UK law does not allow for recovery of Gambling debt, so I'm not sure if the OP would have a valid case or not. Not even sure if this would be considered gambling debt or not as credit was not advanced by the broker

 

[stevespray]

Debts incured via financial spreadbetting are enforceable under UK law. That isn't really the issue here. The issue is the client having knowingly traded on incorrect pricing wanting to claim his ill gotten gains. The firm have spotted the error and exercised what they feel is their right in reversing the trades where mispricing took place. At face value the firm appear to have acted fairly and the client hasn't actually suffered financially since all that the firm have taken back are perceived profits from the trades. Despite the clients account now showing a negative balance he / she is not actually 'out of pocket' because the client removed funds and has them in an external account.

 

[Ross Spur]

Whatever else, that it took two weeks for CS to decide they'd made a mistake reflects badly on the efficiency of the company. A few thousand quid is nothing to them, so you'd think they would have left the trades standing rather than look like money-grabbing amateurs on T2W.

 

[TheBramble]

Show some respect. They're professional money-grabbers.

 

[Ross Spur]

Show some respect. They're professional money-grabbers.

I'm very, very sorry.

 

[wackypete2]

Show some respect. They're professional money-grabbers.

Peter

 

[capitalspreads]

Dear broadex, Simon is on holiday at the moment (sometimes he is allowed out of the office!) so I am replying on behalf of Capital Spreads. Maybe these screenshots attached will clear this matter up and show why we have reversed some trades.

As you can see the underlying SMI never actually traded at these prices since the spread was some 500 points wide meanwhile our spread remained fixed a 4 points and so the price displayed on our platform at the time was incorrect. I am sure you can appreciate that this is by no means "cheating" on our part and that if you happened to have traded the other way and lost money, we would have given you your money back.

Angus

Over the past 2 weeks i had placed a couple of trades on Capital Spreads and which were executed. I even closed some of the positions and took some cash out. However this week i realized my account credit balance of £5k was reduced to negative balance. Without warning or advice from Capital Spreads. When I called Capital Spreads, i was told that all the trades executed in the past 2 weeks were being reversed because their trading system had "MISPRICED" the products, therefore my account profit of about £3k was reversed. When I raised the complain in writing they said they will reply in any event within 8 weeks from the receipt of your complaint. In the meantime my account has been made red (in debit) and I can’t trade for 8 weeks!!

These positions were genuine trades done over 2-3 weeks and when I made a profit, they withdrew the deals. I find this unfair and cheating to investors/ traders. This is real cheating. Imagine if I bought a car 2 weeks ago and sold it after. And the original seller comes back to me and say, by the way the price I sold you the car was incorrect, you now owe me more money. This is in essence what Capital spreads is doing. If any business operated this way, then for deal executed deal is not a guaranteed deal with this company. They can look at this anyway they wish but when the deal has gone through in the books the deal is done. One can do not back off on deals you do not like. If I backed out on all the deals I lost on over the years I would be £20,000's pounds better off. I cannot believe a big company like Capital Spreads would do such an ungentlemanly trick over a mistake on their side. I was expecting that there would be some explanation apart from we will get back you in 8 weeks time!!. They did not apologise or admit to be at fault.

These were Equity Indices. I bought one SMI September future index at 6120 and the SMI spot index was 6300. After 2 weeks Capital Spreads say the price of the SMI September future index was mispriced by their system at 6120. It should have been more close to spot at 6300.

 

[PipStar]

As you can see the underlying SMI never actually traded at these prices since the spread was some 500 points wide meanwhile our spread remained fixed a 4 points and so the price displayed on our platform at the time was incorrect. I am sure you can appreciate that this is by no means "cheating" on our part and that if you happened to have traded the other way and lost money, we would have given you your money back.Angus

The problem is it took you 2 weeks to notice this error and fix it. If you were NFA registered you'd have no chance of reversing these trades after 2 weeks.

 

[broadex]

I think poster mentioned withdrawing some cash. I guess once the trades were reversed that would take him negative. eg if you start with 1k then make 2k profit and withdraw that 2k when that 2k is reversed you are going to be -1k. I aksed him this in about the 3rd post or so but he didnt reply. Whatever the truth is i completely agree we dont seem to be getting the full story. For all we know he may even be up in cash terms and its now just CS chasing him for the cash.

Sorry i ddint read your reply. During the concerned period i took some of the cash out but also made a deposit. After CS had reversed the trades the cash balance plus other outstanding trades (which are in net loss) left my account in net debit balance. Hope this clarifies your question.

 

[broadex]

UPDATE:

I have written again to CS once AND this is their repsonse:

"...we acknowledged your complaint on XX and in line with Financial Services Authority regulations, we have up to 8 weeks to issue you with a final response with regards to your complaint"

The delay in resonse is now costing more money...my autotrades are being cancelled as my trading resources are low.

 

[TheBramble]

broadex - why are you still trading with a company with whom you appear to have an issue?