Owing money to a broker

[anguished]

If I owe more than 6000 pounds to my broker, what kind of legal actions can they take against me?

I opened an account with a popular spreadbetting company C-M-C while I was working in the UK. I started with 3000 pounds, and over a couple of years I managed to go up to 4000 pounds. However, a few days ago, a crazy overnight move on a stock I was investing in put me at -6000 all of a sudden.

Needless to say, I am very sad and disappointed at my terrible risk management, as those were all the savings I had and I currently do not have a job. But I am even more worried about any legal actions that CMC may take to get their money back and the effect this may have in my job search, as my inability to pay debt may show up in background checks.

Anyone had any idea about how this works?

 

[dealer911]

If I owe more than 6000 pounds to my broker, what kind of legal actions can they take against me?

I opened an account with a popular spreadbetting company C-M-C while I was working in the UK. I started with 3000 pounds, and over a couple of years I managed to go up to 4000 pounds. However, a few days ago, a crazy overnight move on a stock I was investing in put me at -6000 all of a sudden.

Needless to say, I am very sad and disappointed at my terrible risk management, as those were all the savings I had and I currently do not have a job. But I am even more worried about any legal actions that CMC may take to get their money back and the effect this may have in my job search, as my inability to pay debt may show up in background checks.

Anyone had any idea about how this works?

Really sorry to hear about this - I think your best bet would be to talk to the company and try and work out some repayment plan - if you are seen to be reasonable about it If they do take you to court it will work in your favor - bad enough to lose your savings but to go into debt must be a nightmare - offer them £200 per month or something like that .

 

[elitejets]

1. Have you entered into a conversation with CMC regarding your predicament?
2. What have CMC done so far?
3. Can you borrow the money from someone to pay them off?

You might be able to file for bankruptcy, but i believe you wont be granted any credit for 5 years ( altho I am not sure how long it will stay on your credit history ).

If I was you, I would call the CAB (citizens advice bureau), they will have seen this many times before.

Good luck.

 

[advfntrader]

f*ck. you must have been seriously long on a stock ? what was it ?

 

[scose-no-doubt]

Gaming debts are not legally enforcable... I'm not a solicitor but to me it stands to reason that if spreadbetting is classed as gaming for taxation legislation purposes then it may extend to other legislation too. I'd have my fine tooth comb out and be playing that angle if I were you. Either that or take the blood from a stone approach.

This situation is unfortunate for everyone but do not let them bully you.

Good luck

 

[Sunshine On Leith]

If I owe more than 6000 pounds to my broker, what kind of legal actions can they take against me?

I opened an account with a popular spreadbetting company C-M-C while I was working in the UK. I started with 3000 pounds, and over a couple of years I managed to go up to 4000 pounds. However, a few days ago, a crazy overnight move on a stock I was investing in put me at -6000 all of a sudden.

Needless to say, I am very sad and disappointed at my terrible risk management, as those were all the savings I had and I currently do not have a job. But I am even more worried about any legal actions that CMC may take to get their money back and the effect this may have in my job search, as my inability to pay debt may show up in background checks.

Anyone had any idea about how this works?

Give the Consumer Credit Counselling Service a call, they are an excellent charity. They will tell you where you stand, give you advice on the best course of action and walk you through the whole process to getting this resolved.

It will feel like a nightmare just now but you will be able to resolve it. The CCCS will probably work out with you what you can afford to pay and they will write to the people you owe to and request you pay back a certain amount each month.

By getting the CCCS involved you are showing you are serious about repaying the debt and this will work in your favour. At the end of the day they will probably accept your repayment plas as its better to get the moneyy back over x years rather than making you bankrupt and getting nowt.

Also, the CCCS will deal with them on your behalf so no threatinging stressfull calls from debt collectors etc.

Whatever you do dont ignore it. Be honest and upfront with them - remember even though they will act as if youve done something terrible they wuill have seen it a hundred other times.

Good luck.

 

[ns1000]

Gaming debts are not legally enforcable... I'm not a solicitor but to me it stands to reason that if spreadbetting is classed as gaming for taxation legislation purposes then it may extend to other legislation too. I'd have my fine tooth comb out and be playing that angle if I were you. Either that or take the blood from a stone approach.

This situation is unfortunate for everyone but do not let them bully you.

Good luck

I think that argument has been tried a few times. Spread bets are enforceable, and debts legally recoverable.

Your choices are basically pay the debt if you can or expect a court judgement against you. If a judgement is made against you and you can't pay, then you're left either negotiating a payment plan, which CMC will likely agree to as long as it will pay off the debt in a reasonable time, or suing for bankruptcy. If you're not in the UK any more, as you suggest, then this is probably going to be more complex as you would have to declare yourself bankrupt under your local law. You would also have to show evidence of all your assets.

Any judgement against you in the UK can be enforced throughout the EU, so it really depends where you are now, and where your assets are held.

 

[anguished]

Thanks guys. I wrote to CMC about it, but no reply as of yet. I'm a bit afraid of giving them a call.

Moreover, I'm also a bit angry at them because they closed my position in the pre-market at a really high price. If they only have waited for the market to open I would only owe them 4000. This is particularly annoying considering that as a user you cannot even trade pre or after market with c-m-c.

I was actually seriously short on a stock... I will share the details which one once I figure out what to do with this nightmare...

 

[dealer911]

If I owe more than 6000 pounds to my broker, what kind of legal actions can they take against me?

I opened an account with a popular spreadbetting company C-M-C while I was working in the UK. I started with 3000 pounds, and over a couple of years I managed to go up to 4000 pounds. However, a few days ago, a crazy overnight move on a stock I was investing in put me at -6000 all of a sudden.

Needless to say, I am very sad and disappointed at my terrible risk management, as those were all the savings I had and I currently do not have a job. But I am even more worried about any legal actions that CMC may take to get their money back and the effect this may have in my job search, as my inability to pay debt may show up in background checks.

Anyone had any idea about how this works?

Ok I just spoke with a guy I know who used to work at CMC and he said it works like this - 1st you get a phone call - 2 weeks later you get a letter - 2 weeks after that they send a legal demand - then they may begin legal action - I was also interested to learn that CMC in general do not hedge client positions which means that they probably have not lost anything themselves on your trade - he also told me that when the market really crapped out after lehmans they actually just wrote off about £3 mil in debts because they realized they would probably not get it back and would push people into bankruptcy - I'm not sure what stage you are at with CMC but I think you could have a good case for a combination of installments and some kind of write off on at least a portion of the debt - hey if the Greeks can do it so can you!! - try not to get too depressed about it as there is always a way forward !

 

[scose-no-doubt]

I think that argument has been tried a few times. Spread bets are enforceable, and debts legally recoverable.

Your choices are basically pay the debt if you can or expect a court judgement against you. If a judgement is made against you and you can't pay, then you're left either negotiating a payment plan, which CMC will likely agree to as long as it will pay off the debt in a reasonable time, or suing for bankruptcy. If you're not in the UK any more, as you suggest, then this is probably going to be more complex as you would have to declare yourself bankrupt under your local law. You would also have to show evidence of all your assets.

Any judgement against you in the UK can be enforced throughout the EU, so it really depends where you are now, and where your assets are held.

Whoops. Spreadbetting "contracts" enforcable as spreadbetting firms are reguated by the FSA.

Wonder who brown enveloped who to get that sweetner edited in lol.

 

[Sunshine On Leith]

Thanks guys. I wrote to CMC about it, but no reply as of yet. I'm a bit afraid of giving them a call.

Moreover, I'm also a bit angry at them because they closed my position in the pre-market at a really high price. If they only have waited for the market to open I would only owe them 4000. This is particularly annoying considering that as a user you cannot even trade pre or after market with c-m-c.

I was actually seriously short on a stock... I will share the details which one once I figure out what to do with this nightmare...

Doing everything in writing is a better idea. Less stressful and you wont feel pressured into agreeing to something you cant stick to.

To be frank I dont think you should be angry with them for closing when they did. If the margin wasnt in place to cover your losses its their right (and I would say obligation) to close you out as soon as possible and avoid the losses potenitally getting greater.

I certainly wouldnt advise having a go at them for this, dont think it will help your case.

 

[oildaytrader]

I have been robbed by another spreadbetting bucketshop owners operating an overnight robbery book of bets.Is that how they make money?

 

[elitejets]

Doing everything in writing is a better idea. Less stressful and you wont feel pressured into agreeing to something you cant stick to.

To be frank I dont think you should be angry with them for closing when they did. If the margin wasnt in place to cover your losses its their right (and I would say obligation) to close you out as soon as possible and avoid the losses potenitally getting greater.

I certainly wouldnt advise having a go at them for this, dont think it will help your case.

Absolutely agree with the above.
Pay it off and move on.

 

[scose-no-doubt]

Yes ODT they make money by closing out over leveraged trades and (by admission of customer) poorly managed four figure investments then spending money on court costs to recoup the debt by monthly payments.

 

[gooseman]

I have been robbed by another spreadbetting bucketshop owners operating an overnight robbery book of bets.Is that how they make money?

why anyone trades on a market they know a bookie prices "synthetically" from a basket of whatever index is open at that time is completely beond me.

 

[anguished]

Doing everything in writing is a better idea. Less stressful and you wont feel pressured into agreeing to something you cant stick to.

To be frank I dont think you should be angry with them for closing when they did. If the margin wasnt in place to cover your losses its their right (and I would say obligation) to close you out as soon as possible and avoid the losses potenitally getting greater.

I certainly wouldnt advise having a go at them for this, dont think it will help your case.

I am mostly angry at myself, as there is nobody else to blame for my situation.

But regarding C-M-Cs execution, "as soon as possible" would have been in the after market, when I all of a sudden went to -3000, then next day pre market was between -6000 and -4000 and they managed to fish the high. Anyway, this doesn't make it their fault or anything.

 

[Pi3141]

did you have a stop loss in place?

 

[Sunshine On Leith]

I am mostly angry at myself, as there is nobody else to blame for my situation.

But regarding C-M-Cs execution, "as soon as possible" would have been in the after market, when I all of a sudden went to -3000, then next day pre market was between -6000 and -4000 and they managed to fish the high. Anyway, this doesn't make it their fault or anything.

Nightmare mate, can totally undertsand your frustration. Bad enough making the mistake in the first place and that just rubs salt in the wound.

 

[anguished]

did you have a stop loss in place?

I did... but obviously there was a gap.

 

[Pi3141]

omg thats terrible T_______T; hope everything works out for you.