FXCM owed $225 million by customers who lost on CHF

[highbury fx]

those broker are mostly scam bags, we need to keep an eye on them all the time, I have spent the last 2 days dealing with them to make sure I do not get trapped in the future, no one will guarantee to cover for incidents like the one happened the other day, only one said but I have not read the small print....but I am not interested because they do not have an office down here.

For what I understand the only way is to not to have a leverage not more than 1:50, I spoke to what seem a decent broker today and they told me that they have not suffered much on the incident because they keep the leverage very low, especially on the swiss.

Some cowboys were offering high leverage to make more money when clients were losing and now they went burst, to be honest I do not feel very sorry for them....but that is just me

you are saying that leverage of no more than 1:50 would stop this happening?

Ok, lets look at the facts then:

Someone with £2,000 on their account using 50:1 leverage is trading EUR/CHF at approximately £10 per point equivalent. If they bought EUR/CHF in £10 per point at 1.2010 before the SNB removed the floor and got filled after the SNB removed the floor at 1.0600 they would have lost £14,100.

How would maximising leverage to 1:50 have helped you avoid crystalising a negative balance of over £12,000 after depositing only £2,000.

its all very well calling people 'scam bags' but you need to back it up with something that makes sense.

 

[tar]

you are saying that leverage of no more than 1:50 would stop this happening?

Ok, lets look at the facts then:

Someone with £2,000 on their account using 50:1 leverage is trading EUR/CHF at approximately £10 per point equivalent. If they bought EUR/CHF in £10 per point at 1.2010 before the SNB removed the floor and got filled after the SNB removed the floor at 1.0600 they would have lost £14,100.

How would maximising leverage to 1:50 have helped you avoid crystalising a negative balance of over £12,000 after depositing only £2,000.

its all very well calling people 'scam bags' but you need to back it up with something that makes sense.

Trading derivatives is not secure at all , unless you don't use leverage , or you trade options - long only - . You still may lose your deposit .

 

[spinola]

Fraud Act 2006

(from other thread )http://www.trade2win.com/boards/gen...fore-bust-fxcm-lobbied-higher-leverage-2.html

If there is any suspicion that fxcm have been advertising one thing, but doing another as normal practice , then, clients could counter claim if they are pursued using the Fraud act 2006.http://www.legislation.gov.uk/ukpga/2006/35/contents

several handy , concise sections to protect people from Criminal Fraud.

2 Fraud by false representation

(1)A person is in breach of this section if he—
(a)dishonestly makes a false representation, and
(b)intends, by making the representation—
(i)to make a gain for himself or another, or
(ii)to cause loss to another or to expose another to a risk of loss.
(2)A representation is false if—
(a)it is untrue or misleading, and
(b)the person making it knows that it is, or might be, untrue or misleading.
(3)“Representation” means any representation as to fact or law, including a representation as to the state of mind of—
(a)the person making the representation, or
(b)any other person.
(4)A representation may be express or implied.
(5)For the purposes of this section a representation may be regarded as made if it (or anything implying it) is submitted in any form to any system or device designed to receive, convey or respond to communications (with or without human intervention).

http://www.legislation.gov.uk/ukpga/2006/35/section/2

Section 3.

Fraud by failing to disclose information

A person is in breach of this section if he—

(a)dishonestly fails to disclose to another person information which he is under a legal duty to disclose, and

(b)intends, by failing to disclose the information—
(i)to make a gain for himself or another, or
(ii)to cause loss to another or to expose another to a risk of loss.

http://www.legislation.gov.uk/ukpga/2006/35/section/3


So, the legal technique, (as far as I understand) would be to ' counter claim ' against and if they arise a claim etc. Obviously you'd need to prove your case, or use it to see if the other party backs down etc.

But these legal games, are all adversarial , a bit like trading.

It's a nice simple statute, for a change.


Just sharing awareness of this statute .which helps deal with fraud.

 

[Fugazsy]

you are saying that leverage of no more than 1:50 would stop this happening?

Ok, lets look at the facts then:

Someone with £2,000 on their account using 50:1 leverage is trading EUR/CHF at approximately £10 per point equivalent. If they bought EUR/CHF in £10 per point at 1.2010 before the SNB removed the floor and got filled after the SNB removed the floor at 1.0600 they would have lost £14,100.

How would maximising leverage to 1:50 have helped you avoid crystalising a negative balance of over £12,000 after depositing only £2,000.

its all very well calling people 'scam bags' but you need to back it up with something that makes sense.

I did not say it will be avoided, I am saying it will be limited and that is the only way with them, as I said I did my home work and none of them will take responsibility when they cannot supply liquidity which in my view is what we are paying them for..

If you do not know how to read do not accuse others of not making sense....That is all.

 

[tar]

Client Negative Balances Developments

While there are reports that some clients are getting their negative balances cleared by FXCM’s team, this comes as no surprise in light of the company’s official position that it will be treating negative balance issues on a case by case basis.

- See more at: http://forexmagnates.com/fxcm-inc-u...reement-client-funds-25/#sthash.48O2pEPB.dpuf

 

[spinola]

AVOID / LEAVE FXCM Based On Their ' Farce Majeure '

Despite what some pundits may claim, the company is within its full right to treat the situation as force majeure and applying the legal clause mentioned in the client agreement.


- See more at: http://forexmagnates.com/fxcm-inc-u...lient-funds-25/#sthash.48O2pEPB.BxMFShvk.dpuf

So, why be with a firm, who , at any time a government / central bank opens it mouth (which they state in their terms) on policy resulting in a liquidity vacuum, upon which the price adjusts, states , ' all our obligations in our terms and conditions ARE OFF ? '

Based on that one term alone, you should withdraw any funds and go elswhere to a firm who isn't stiffing clients with a ' force majeure ' legal out.


That's what I call I Farce Majeure ! AVOID FXCM. Until they drop their central bank force majeure legal gaming .


Their shares, have to be a sell, based on that one policy headline alone , ehh ?


Certainly their chief dealer is bailing out ....already

An SEC 4-K form filing, revealed that former FXCM Inc Chief Dealer, Michael Romersa, has sold his last 363,807 shares on the 22nd of January in the aftermath of the release of the details of the agreement between FXCM and Leucadia. - See more at: http://forexmagnates.com/fxcm-inc-u...lient-funds-25/#sthash.48O2pEPB.BxMFShvk.dpuf

RUN !

 

[highbury fx]

I did not say it will be avoided, I am saying it will be limited and that is the only way with them, as I said I did my home work and none of them will take responsibility when they cannot supply liquidity which in my view is what we are paying them for..

If you do not know how to read do not accuse others of not making sense....That is all.

you said the only way was not to have a leverage of more than 50:1 and I am saying you are wrong.

The only CERTAIN way to avoid it is to use 1:1. Anything higher and you're trading/betting/coin flipping with borrowed money.

50:1 is high, you must understand that. You cant use terms like low leverage and 50:1 in the same context. It is dangerous. You will likely lose your trading bank roll if you use that high gearing.

Don't take it personally.

 

[Jason Rogers]

Client Negative Balances Developments

While there are reports that some clients are getting their negative balances cleared by FXCM’s team, this comes as no surprise in light of the company’s official position that it will be treating negative balance issues on a case by case basis.
[/url]

Hi tar,

Here is the press release we just issued:

FXCM to Forgive Majority of Clients Who Incurred Negative Balances

NEW YORK, Jan. 28, 2015 (GLOBE NEWSWIRE) -- FXCM Inc. (NYSE:FXCM), announced today its decision to forgive approximately 90% of its clients who incurred negative balances in certain jurisdictions, on January 15, 2015 as a result of the Swiss National Bank announcement on that date. FXCM will notify the applicable clients and adjust applicable client account statements in the next 24-48 hours. "FXCM worked diligently to reach this decision and we are extremely appreciative of our clients for their patience and loyalty as we worked through this," said Drew Niv, CEO of FXCM.

The SNB announcement, extreme price movements and the resulting lack of liquidity were exceptional and unprecedented events causing many market participants to incur trading losses. These events were unforeseen and beyond the control of FXCM.

FXCM will also notify certain clients (such as institutional, high net worth, and experienced traders who generally maintain higher account balances) requesting payment of negative balances, pursuant to the terms of the FXCM master trading agreements. This group represents approximately 10% of clients who incurred negative balances which comprises over 60% of the total debit balances owed.

Read the full press release: http://ir.fxcm.com/releasedetail.cfm?ReleaseID=893269
​

Jason

 

[tjs85]

those broker are mostly scam bags, we need to keep an eye on them all the time, I have spent the last 2 days dealing with them to make sure I do not get trapped in the future, no one will guarantee to cover for incidents like the one happened the other day, only one said but I have not read the small print....but I am not interested because they do not have an office down here.

For what I understand the only way is to not to have a leverage not more than 1:50, I spoke to what seem a decent broker today and they told me that they have not suffered much on the incident because they keep the leverage very low, especially on the swiss.

Some cowboys were offering high leverage to make more money when clients were losing and now they went burst, to be honest I do not feel very sorry for them....but that is just me

The companies that ran into trouble did so as they had hedged the clients bets and therefore weren't profitting when their clients lost, so the argument that they were offering them leverage so they blew up in this instancee does not make any sense.

It is the fact that clients blew up and were unable to cover the losses, losses the brokers themselves had to cover with their counterparties, that led to insolvencies.

 

[tjs85]

I did not say it will be avoided, I am saying it will be limited and that is the only way with them, as I said I did my home work and none of them will take responsibility when they cannot supply liquidity which in my view is what we are paying them for..

If you do not know how to read do not accuse others of not making sense....That is all.

Do you not understand that all the major banks/liquidity providers pulled their prices? What on earth do you expect the brokers to do?

These boards are full of people simply unwilling to accept they took a bet on borrowed money and it went badly for them, each indivdual has to take responsibility for their own actions rather than crying foul play to the brokers who were as much the victims in all this as their clients.

I ask the question again: What answer do you think the brokers will receive when they ask their counterparties to clear their negative balance? I can tell you this porcess has already begun and the standard response consisted of two words and the second one was 'off'.