OK, an update as promised. I have been told that CS reserve the right to reverse-out any trade that they feel is from an unfair price. Here is the quote from the email:
"Due to the nature of online trading systems and the potential unreliability of market price feeds London Capital Group Ltd may in its absolute discretion remove or delete bets and any associated bets (i.e. any bets closing subsequently deleted bets) which have been made over the Online Trading Platform which in the opinion of London Capital Group Ltd do not reflect the actual market prices at the time of the placement of the relevant bet."
So, even though they accepted the trade, sent me an email saying they trade was accepted, and then 2 hours later let me close the trade - again sending me an email - it seems the price I went long on 2 hours previously did not "reflect the actual market price at the time".
I'm asking them for confirmation as to whether this is their view of events - and a fair statement for me to make. Will keep you posted.
Dave - Not trying to take sides here but this sounds like nonsense. If you have your contract notes for both sides of the trades then I would suggest that all any firm could do is contact you and ask, rather politely, if you would consider allowing them to reverse the trades. Sure, many of the firms harp on about their right to cancel trades but all they can really do is ask you. They certainly cannot just go into your account via their back office and materially alter contract details without your approval. Under the terms of section 412 of the Financial Services & Markets Act all spread bets entered into are legally enforcable by either party. The key wording there is "entered into". If you feel that the trades are valid then it is your right to enforce the contract notes - there is nothing any firm can do to stop you doing that. They may reel of various terms and conditions but the fact is that they cannot place (or interpret) any term or condition in their T&C's which contradict what is written (or the implied rights given) under the terms of the Financial Services & Markets Act of 2000.
This passage taken from the T&C of another leading spread betting firm;
"Nothing in this Agreement will exclude or restrict any duty or liability owed by us
to you under the Financial Services and Markets Act 2000 (the “Act”) or the FSA Rules
and if there is any conflict between this Agreement and the FSA Rules, the FSA Rules
will prevail."
This, from a legal perspective, is applicable to ALL spread betting firms as the Financial Services & Markets Act of 2000 prevails over Customer Agreements.
Therefore, if a firm were to specify that they had the right cancel trades (for whatever reason) then they would clearly be seeking to "exclude or restrict" some of their "duty or liability" since the Act clearly states that all bets entered into are legally enforceable.
As I said before, they have very little room for manoeuvre. Contractually speaking the issue revolves around the point in time when the contract was formed. Effectively the moment a contract is formed it becomes enforceable by both parties. The firms are in a weak position because there doesn’t seem to be any facility, under the various rules, for these kinds of ‘errors’ or ‘disputes’. This seems to make it a fairly simple case of ‘Caveat Emptor’; Let the buyer beware! In this case the seller or provider (ie the spread betting co) should be equally aware as the law appears to state that ‘all spread bets are legally enforceable by EITHER party’. In this case the firm buys and sells contracts in its own derivative products.
I would suggest therefore that the ball is in your court. Rather than letting the firm suggest to you what is going to happen you could in fact tell them what is going to happen. (ie you are going to enforce the bet or let them off.) If push then came to shove the firm would argue that the prices were wrong and you would argue that the prices were correct – the two arguments would obviously conflict and hence the dispute would have to be resolved through due legal process which would bring in your legal right to enforce your contract notes. In the meantime I would insist that the disputed funds be returned to your account (since they are, until the dispute is settled, your funds) pending the outcome of a ‘dispute settling’ process.
Steve.
