GUILTY Case# 2012-056 | Kovacs Norbert vs fxopen.com

[Pharaoh]

We can all sit around and make accusations about who is working for or against FxOpen in this thread, or we can focus on the real issues of this case.

In FxOpen's favor, they seem to have eaten losses and only cancelled trades instead of passing the losses on to the client.

On the other hand:

1. FxOpen admitted that their LP deliberately provided fake prices. That means that this is not the sort of technical issue that the TOS are designed to cover.

2. FxOpen's first response to the complaint was "If you don't like it, take it to the regulators" once the source of the issue was determined.

3. FxOpen continues to hide the identity of an unethical (criminal?) LP because of a non-disclosure agreement.

4. FxOpen has failed to make any comments about attempting to recover funds from the LP to try to compensate traders. Further, FxOpen appears to have ignored my suggestion that they move towards an open and transparent model where LPs are listed. I wonder why FxOpen hides the names of their LPs while some other brokers brag about who their LPs are.

5. Kovacs is feeling unhappy that the supposedly non-manipulated ECN prices from FxOpen were in fact deliberately manipulated by an anonymous LP resulting in profitable trades being cancelled. FxOpen's reaction to this is to threaten to sue him for exposing these facts.

Guilty, Guilty, Guilty!!!

 

[FXCobra]

In this post, I show how the Real Feed Error between LP-Broker appears in client mt4.

Look at the huge pips differences in highs/lows for every pair in market watch prices and chart reflects it in mysterious candle! Not 3 or 5 pips like Fxopen tried to picture it to make an excuse for cheating Kovacs.



I deleted parts of the broker mt4, account number(Live), broker name, orders, in order that the broker do not get affect by this picture in anyway. Becuase it proved a Good Broker in this case by solving it and fast with no noise as fxopen had done with same LP-Broker Feed Error problem. Also, my account was effected by big loss trades and margin call ofcourse resulting from this abnormal price feed by LP, but broker returned everything to normal as it was before this price feed error happened, so I have no complaint whatsoever on this case nor the broker.
You read it right, this situation is similar to Kovacs or even worse because orders were affected and loss had happened but broker didn't run away as fxopen and put blame on LP but fixed it quickly. The worse fxopen had done is made profitable trades losses while my broker made from loss trades, neither profits nor losses but returned to same prices as it was before error. Which is completely fair for both parties.

To remind you, this broker is a ECN broker and one of the brokers I personally deal with, not satisfied with some trading parts as slippage of broker but for the major parts as in this case, fully satisfied. So anyone trying to dress me in a ridiculous name of broker competitor is foolish. I'm talking now about one of my brokers.

One Chat with the broker had fixed the problem at same day.

Read what the broker had to say before & after it fixed its own mistake.

First with live chat(briefly): Broker: sorry, our service is down just now, all orders effected will be restored

Me: Okay, when will they be restored you think??

Broker: in one business day

Me: you mean tomorrow

Broker: no, it will be very soon, our tech dept is processing now
-----------------

You see Ladies and Gentleman how good brokers work.


Message from broker(after problem fixed):

Dear ***********,

There were erroneous price activities today at ******** server time on our systems due to error in pricing fed to us by one of our liquidity providers.

All orders executed at that time were reviewed and affected trades were adjusted.

Should you any inquiries or should you require any further information, please do not hesitate to contact us.

We sincerely apologize for the inconvenience.

*********
*********
*********
--------------

You read it write people, these sentences say it all and teaches fxopen a big lesson:

""due to error in pricing fed to us by one of our liquidity providers"" same as in Kovacs-fxopen case but not some weird 3-5 pips difference??!!!
"were reviewed and affected trades were adjusted" Right, returned everything to normal, my orders weren't affected in anyway(after fix)
not as with Kovacs-fxopen case, profitable trades became loss, and LP fault not our fault so we're not responsible as fxopen scam broker had done.
Broker did not attack the client with threats and did not say go to regulators to charge us or take your money if you can, you can do nothing with us-fxopen.

You see how good it is when the broker deal nicely fairly with its clients with no taking the disclosure and agreement as armor for itself to cheat the client at anytime and protect itself and the LP faults.

I think this added proof by a comparison of how brokers deal with such case, comparison between good brokers(at least in this serious case, later don't know), and Scam brokers like fxopen.

Look at difference in taking responsibility and dealing full seriously with the problem.

Just the broker itself and its clients might know what broker am talking about but I am sure they are satisfied with the broker quick action and fast solution.

Hats off for the broker in this case, willing to see same if anything like this ever happen later.

For traders who are still confused if fxopen guilty for sure or not, this post must have gave enough information how Good Brokers deal in such cases and those who voted not guilty must WAKE UP and reverse it to GUILTY


Fxopen GUILTY.

 

[athenafx]

1/ Some time ago, I discovered a permanent error in the data sent by the MT server of a reputable broker. Bid was always equal to Ask. So any trade was almost immediately in profit. Of course I did not place any trade until the technical issue was resolved.

2/ I don't believe in "secret" liquidity providers. In such a case, the broker will have no corporate customers because one of the very first question is "How many LP do you have and who are they ?" Trading is non sense ff you can't make sure that your trades are really placed on the real market ?

 

[Onyebuchim C. Obike]

We can all sit around and make accusations about who is working for or against FxOpen in this thread, or we can focus on the real issues of this case.

In FxOpen's favor, they seem to have eaten losses and only cancelled trades instead of passing the losses on to the client.

On the other hand:

1. FxOpen admitted that their LP deliberately provided fake prices. That means that this is not the sort of technical issue that the TOS are designed to cover.

2. FxOpen's first response to the complaint was "If you don't like it, take it to the regulators" once the source of the issue was determined.

3. FxOpen continues to hide the identity of an unethical (criminal?) LP because of a non-disclosure agreement.

4. FxOpen has failed to make any comments about attempting to recover funds from the LP to try to compensate traders. Further, FxOpen appears to have ignored my suggestion that they move towards an open and transparent model where LPs are listed. I wonder why FxOpen hides the names of their LPs while some other brokers brag about who their LPs are.

5. Kovacs is feeling unhappy that the supposedly non-manipulated ECN prices from FxOpen were in fact deliberately manipulated by an anonymous LP resulting in profitable trades being cancelled. FxOpen's reaction to this is to threaten to sue him for exposing these facts.

Guilty, Guilty, Guilty!!!

All what you have said is covered in the TOS of FXOpen one way or the other. That is the reason why they seem to have a Legal Backing. If i knew all this like you have pointed out then what's the need trading with them? These are some of the findings i saw when i digged in dip in their TOS and i had to seek clarification, which they stood firmly to their position. That is why there should be a broker listing which exposes these flaws.

FXOpen's reaction to Kovacs issue is not diplomatic but they are protected to do so in accordance to their TOS. This is the part we have to see and find out other ways of securing Kovacs original capital before the mess came up.

FXOpen's TOS are a bit weird but point blank. So traders beware.

 

[Onyebuchim C. Obike]

I would suggets the FPA list out counts for votes.

E.g

1. LP's Deliberate Fault (Vote guilty or innocent)
2. FXOpen collaborated with their LP in regards to price feed errors (Vote guilty or innocent)
3. FXOpen breached the terms of contract (Vote guilty or innocent)
4. FXOpen did not take all neccessary protective caution for its client (Vote guilty or innocent)
5. FXOpen illegally closed Kovacs Account without clear FACTS (Vote guilty or innocent)
6. Any other thing.

The votes should be collated and the average submission would help in getting something out of this case.

Finally a Guilty or Not Guilty Vote without explicit reasons would do Kovacs no good because FXOpen's TOS covers them for what happened to Kovacs. The LP should be the target and the regulators should be sought for assistance on this.

 

[Boko Maru]

The LP should be the target and the regulators should be sought for assistance on this.

Just to expand on a point I made earlier.

Everyone is assuming FX Open actually HAS liquidity providers (LP). Does anyone know that for sure? And if so, how do you know? Can that be verified in some way? They haven't named any of their LP's. Everything is all just some mysterious, anonymous, un-named blame game on some mysterious LP, and still nobody knows who they are.

What I've claimed all along is that when FX Open states they even have liquidity providers, it's probably a boldfaced lie to begin with. I think they are 100% a market maker, and THEY are their own LP, meaning they simply take the other side of every trade. Wouldn't that explain the entire issue on this thread? Pretty simple really. They lost a lot of money when the trader took advantage of the "off market" prices.

But instead, we get this complex, convoluted story about some unknown, un-named "LP" that supposedly provided false prices for whatever reason (i.e. it was their fault and not FX Open's). Again I think it's all a crock. They don't have any LP's. I think they're simply a bucketshop no matter what they claim. It just sounds a lot better to market themselves as an "ECN" with numerous "liquidity providers." How many traders opened accounts there because they wanted to feel good about being with a "real" ECN?? I bet quite a few...

Just saying, but that sure make a lot more sense to me than this LP story bullcrap...

 

[FXCobra]

Just to expand on a point I made earlier.

Everyone is assuming FX Open actually HAS liquidity providers (LP). Does anyone know that for sure? And if so, how do you know? Can that be verified in some way? They haven't named any of their LP's. Everything is all just some mysterious, anonymous, un-named blame game on some mysterious LP, and still nobody knows who they are.

What I've claimed all along is that when FX Open states they even have liquidity providers, it's probably a boldfaced lie to begin with. I think they are 100% a market maker, and THEY are their own LP, meaning they simply take the other side of every trade. Wouldn't that explain the entire issue on this thread? Pretty simple really. They lost a lot of money when the trader took advantage of the "off market" prices.

But instead, we get this complex, convoluted story about some unknown, un-named "LP" that supposedly provided false prices for whatever reason (i.e. it was their fault and not FX Open's). Again I think it's all a crock. They don't have any LP's. I think they're simply a bucketshop no matter what they claim. It just sounds a lot better to market themselves as an "ECN" with numerous "liquidity providers." How many traders opened accounts there because they wanted to feel good about being with a "real" ECN?? I bet quite a few...

Just saying, but that sure make a lot more sense to me than this LP story bullcrap...

Very Good Reading of facts.

"""I think they are 100% a market maker , and THEY are their own LP, meaning they simply take the other side of every trade. Wouldn't that explain the entire issue on this thread? Pretty simple really. They lost a lot of money when the trader took advantage of the "off market" prices""

This might be totally right.

To be honest, I would care less if they are the LP or if they have LP's at first or what's their names if the broker fixed the problem as my broker had done. But fxopen to say it's the LP fault and refuse to name it nor announce it will charge it but the laughable is threatening the client to charge him is the Big Hidden Truth which if we track might lead to what you explained.

 

[Onyebuchim C. Obike]

I also have reasons to believe your assertions that FXOpen are not honest enough or open enough to reveal who actually is their LP.

There's a clause in their TOS that makes them look more like a Market Maker.

See part of my discussions with them on this particular issue......



28. CROSS TRADE CONSENT
The undersigned hereby acknowledges and agrees that a situation may arise whereby an officer, director, affiliate, associate, employee, bank, bank employee or dealer associated with FXOpen may be the opposing broker for a trade entered for the undersigned's account.


MY QUESTION HERE....
(Is this a Market Maker Scenario? Is this applicable to ECN Accounts?)


CLAUSE CONTINUES
The undersigned hereby consents to any such transaction, subject to the limitations and conditions, if any, contained in the Rules or Regulations of any bank, institution, exchange or board of trade upon which such buy or sell orders are executed, and subject to the limitations and conditions, if any, contained in any applicable Regulations of any applicable regulatory agency.



FXOPEN LEGAL REP ANSWER TO MY QUESTION
This provision consummates that FXOpen makes no obligation to the Client to exclude its affiliates and various associated persons from the pool of liquidity providers on the ECN platform. This is not the same scenario as the classic Market Maker model, which by default excludes any external liquidity providers.


These are some of the things that scared me as regards their true ECN Status

 

[Boko Maru]

I'm not sure about all the legal mumbo jumbo in their trading agreement, but they advertise that they have both market maker accounts and ECN accounts, so it's already acknowledged that they are a market maker at least some of the time. It's just my opinion that the "ECN accounts" are a complete farce, and ALL their accounts are market maker, with FX Open as the counterparty, not some mysterious LP.

As I mentioned in an earlier post, I have traded with a true ECN type broker in the US for years, who reveal their LP's. And I have never had an issue even remotely resembling this bullcrap. Never had any trade adjusted, deleted, etc., or any funky quotes or execution EVER. What is being described in this case is not what it's like in a true ECN environment, but it is precisely the kind of thing that happens in bucketshop broker accounts.

Who knows; maybe they really do have real LP's, and all this BS happened exactly the way they say. But I doubt it...

 

[FXCobra]

I also have reasons to believe your assertions that FXOpen are not honest enough or open enough to reveal who actually is their LP.

There's a clause in their TOS that makes them look more like a Market Maker.

See part of my discussions with them on this particular issue......



28. CROSS TRADE CONSENT
The undersigned hereby acknowledges and agrees that a situation may arise whereby an officer, director, affiliate, associate, employee, bank, bank employee or dealer associated with FXOpen may be the opposing broker for a trade entered for the undersigned's account.


MY QUESTION HERE....
(Is this a Market Maker Scenario? Is this applicable to ECN Accounts?)


CLAUSE CONTINUES
The undersigned hereby consents to any such transaction, subject to the limitations and conditions, if any, contained in the Rules or Regulations of any bank, institution, exchange or board of trade upon which such buy or sell orders are executed, and subject to the limitations and conditions, if any, contained in any applicable Regulations of any applicable regulatory agency.



FXOPEN LEGAL REP ANSWER TO MY QUESTION
This provision consummates that FXOpen makes no obligation to the Client to exclude its affiliates and various associated persons from the pool of liquidity providers on the ECN platform. This is not the same scenario as the classic Market Maker model, which by default excludes any external liquidity providers.


These are some of the things that scared me as regards their true ECN Status

It do not need all this search into the agreement words to protect the broker or show it innocent.

If I want to search into every detail in brokers agreements, i'll find many bang bangs in most sentences and will not open any account with any broker.

When the broker willingness is good, no need for all this.

If any broker makes a mistake, fix it fast and let both parties be happy.

It's ridiculous to throw brokers technical problems on clients even if all disclosures or agreements in the whole world defend the broker.