GUILTY Case# 2011-073 | m1refaat vs www.afb.com.kw

[Ingot54]

All Rules are available on the Web Site and The Frequently Asked Questions page via this link Islamic Investment, Forex Trading, Commodities Brokers, Oil Trading - AFB - FAQ
including Fixed Spreads Policy and No maintenance margin Policy
these are some of the Frequently Asked Questions :
If I hedged my position on a certain pair, will my margin will be zero on this pair?
Yes! Hedging your position will turn your margin to zero on this pair.
Do you increase your spreads in volatile market?
No! AFB doesn't increase its spreads in volatile market. We offer our clients fixed spread policy
these are some examples from their web site Today.

Thank you M1refaat for providing that link, and Pharaoh for that screenshot.

It is very hard to see AFB maintaining a stance of innocence now, given that the policy on which you based your trust in them is still clearly stated today:

No! AFB doesn't increase its spreads in volatile market. We offer our clients fixed spread policy

Clearly, they have spread a net to ensnare their trusting clients. They seem to have openly stated one thing to make the client relax and feel secure in operating under a fixed spread scenario, then closed the trap and executed their plan.

This case seems to me, to be very different from the usual "we-are-keeping-your-money" scam.

It is different because Arab Financial Brokers K.S.C.C. are deceiving a fellow Arab from a position of trust, based on shared sacred values.

And in law, in just about every human society, there is no more grave and damning sin than to deceive a brother, from a position of trust.
To me (holding certain spiritual values myself) I can think of nothing more perverse or wretched, than to use personal spiritual values (quite apart from good business ethics and personal integrity) to lure a brother to his ruin.

Quite despicable if it is true.

In the absence of a statement by Arab Financial Brokers to the the contrary, or in their own defence, I am increasingly unable to maintain a position of neutrality. I believe they knew what they were doing when they deliberately moved the goalpost after the ball has been kicked.

I am thinking that this company needs to fix the error, and offer an explanation and an apology. There may still be some reason this has happened - but it is not looking good for them. AFB also need to provide clear and indisputable evidence that they made every effort to notify clients of the changes that caused this situation, and that evidence needs to be dated and clear.

That's about as kind as I can be towards them, given the evidence. I do not think it is reasonable for a trader to be watching the company website 24/7 in case they happen to post a message about widening spreads, or changing their margin call policy.

Further, their website is still not reflecting the changes they say they used in stopping M1refaat's positions out of the market.

No, a reasonable and caring company would notify all clients of the situation via email (this is not difficult technology, to mass email every client) BEFORE such changes took effect. But given they are still claiming today to offer the same service, I think they have a lot of explaining to do.

Keep in mind that giving any company a scam rating is a very serious thing, and I am trying to give them every opportunity to explain and rectify the problem. But stealing account funds through deliberate deception is even more serious, because it ensnares the innocent.

Have we heard from Arab Financial Brokers yet? They are leaving it very late to offer something in defence.

 

[drm00dy]

AFB

Thank you all for objectivity in explaining this case, I believe that until this moment AFB still offer to their clients a fixed spread in all market conditions and they have the right to increase spread if they considered a necessary according to their corresponding markets and liquidity providers.
I remember that AFB increased their spread only twice and it was on Christmas and New Year 2011, and according to spreads occurred in the market after U.S markets closed, AFB had to increase their spreads one or two points to comply with spreads offered by their liquidity providers.
Here is a link posted through AFB website at that time and it’s a copy for an email sent twice to their clients to notify them about the possibility of increasing spreads according to the market situation.
The link posted on Dec.2010 Islamic Investment, Forex Trading, Commodities Brokers, Oil Trading - AFB - News - Announcing Trading Hours on Ne you can see the awareness at the bottom of the mail.
I am with you that if any company would like to change any of their policies they have to notify their clients by any suitable way to assure that all their clients been notified, so that AFB keeps their clients updated with any changes by sending them an email to explain these changes and the purpose of it.
and if one company made any action didn’t reach some of their clients satisfactions that doesn’t mean that the company is bad or they trying to scams their clients.

 

[m1refaat]

Finally AFB replied

Finally AFB replied, thanks for drm00dy reply.
I could not understand the sentence (until this moment AFB still offer to their clients a fixed spread in all market conditions and in the same time they have the right to increase spread if they considered a necessary according to their corresponding markets and liquidity providers) !!!
It is well known that spreads widen during volatile periods. But if ABF says they offer fixed spreads during volatile times,
then yes, I truly have been scammed!! Isn’t it?
Again what AFB website says clearly (in very clear language):
Do you increase your spreads in volatile market?
No! AFB doesn't increase its spreads in volatile market. We offer our clients fixed spread policy.
I want to ask a simple question :
(Why they didn’t say they have the right to increase spread if they considered a necessary according to their corresponding markets and liquidity providers)?? BEFORE such changes took effect {and give a proper Notes period for customers to adjust their positions}

The problem is what the meaning of word policy on which I based my trust in them (No! AFB doesn't increase its spreads in volatile market. We offer our clients fixed spread policy)

Clearly, they have spread a net to ensnare their trusting clients. They seem to have openly stated one thing to make the client relax and feel secure in operating under a fixed spread scenario, then closed the trap and executed their plan.
AFB said that they sent two Emails for each single customer
Can they send me a copy of that emails sent to my email address??
I have been kept all the AFB emails that sent to my email address,Because I normally use the email to send them a copy of my deposit papers to my account and they send the confirmation of the deposit.
About this link I have mentions about it already in the case details
I do not think it is reasonable for a trader to be watching the company website 24/7 in case they happen to post a message about widening spreads, or changing their margin call policy.

 

[extremerrage]

:unhappy: well for me once a broker will start playing tricks i will know directly that something fishy is goin on or something is about to happen ,, and the problem with arab brokers and the cyprots brokers most of them intend to play tricks and dont bother ur self about there registration . coz they r like cartels they can do every thing without being followed

 

[obi4eze]

A serious case. Has AFB replied? Don't they have any defense to make?

 

[1954]

Original FPA Traders Court Submission by m1refaat:
I've attached the statement after changing the spreads

I understand there are 2 issues (a) Compliance with company rules (b) Close of trade account. Under (a) you mentioned that company offers fixed spread as low as 1 pip . This statement already explains that the fixed spread has a variation range although not explicitly stating which currency pair they are referring to. You have a duty to find out details. For (b) I dont think changing spread can cause margin to be reduced to zero unless you over trade. I opine that your case is not a pure scam situation

 

[m1refaat]

A serious case. Has AFB replied? Don't they have any defense to make?

yes,you will find their reply under name/ drm00dy on 09-29-2011
it's weak defense but still good to hear from them.
I want to mention again that there are two URL and two addresses for the company as below
http://www.afbfx.com
http://www.afb.com.kw
AFB - Arab Financial Brokers | Office 3501, 5th floor, Maximos Plaza Tower 3, Maximos Michaelidi Street | Limassol, limassol 3106, Cyprus
AFB - Arab Financial Brokers | Monther Building - AL Salhyah | Kuwait City - State of Kuwait

 

[m1refaat]

I understand there are 2 issues (a) Compliance with company rules (b) Close of trade account. Under (a) you mentioned that company offers fixed spread as low as 1 pip . This statement already explains that the fixed spread has a variation range although not explicitly stating which currency pair they are referring to. You have a duty to find out details. For (b) I dont think changing spread can cause margin to be reduced to zero unless you over trade. I opine that your case is not a pure scam situation

I was trading GBP/USD and the spread was fixed as 3 pips.
if you see these two positions with tickets No.(2165655 buy-2171664sell) for example from the statement you will find that the two positions closed on 2010.12.31 at 21:47 with price 1.5570 and 1.5577 {with 7 pips deference between buy and sell !!!
and if you see my statement on 2010.12.30 you will see all my open positions were GBP/USD.
and all these positions have been closed on 2010.12.31 at 21:47 due to change and increase the spreads!!!

 

[MaxDoom]

on balance..

I have read the case and I do have some sympathy for you. However, at the same time for a spread change to force a margin call means that you are playing right into the brokers hands by trading well past what your account can really support and for that I feel that you are partly to blame.

Of course it would be good practice for all brokers to advance notify clients of spread changes etc. but the real world of forex brokers means that many of them are just waiting for the opportunity to close your positions with margin calls or stop running and that is not about to change. It is my experience that people are attracted to these unheard of foriegn brokers because of the terms they offer, low spreads, low margins, huge leverage etc. but if your trading cannot be successful using standard spreads and leverage etc. then trading is not for you, your results must overwealm the cost of trading, so whilst minimising costs is good, taking bucket shop risks outweigh the benefits.

I would also point out that these cases on FPA are a great thing but will only remain so and carry some level of fear for the brokers if they are not used for marginal (excuse the non-intended pun) cases which I believe this one is.

I know some will disagree with me but I feel that you have chosen a bucket shop, traded to the limit and walked right into a grey area of account management that you would not expect from a decent broker - but then that is not what was chosen. So having said all of that I do feel the broker is lacking but not strongly enough to vote guilty, nor will I vote not guilty in this case.

I hope my comments are of value.

 

[m1refaat]

Still waiting for the evidence (a copy for an email sent twice to clients to notify them about the possibility of increasing spreads according to the market situation).