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

[fxfrench]

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.

While I am not supposed to join in the debate for FXOpen NZ, I would like to help you with this question.

Please take a look at FXOpen AU's Product Disclosure Statement. http://www.fxopenaus.com/Download.aspx?name=FXOpen_Product_Disclosure_Statement.pdf

On page 26, some LPs are named (They can be subject to change). FXOpen AU shares some of these LPs with FXOpen NZ and FXOpen NZ can be one of the LPs for FXOpen AU and vice versa. The ECN model is explained in detail in this document as required by ASIC and Australian Law. This ECN model is pretty much the same as used by FXOpen NZ.

PS. By issuing the PDS here, it is by no means to be considered a recommendation or sale and that your personal financial needs may not be taken into account.

 

[Boko Maru]

While I am not supposed to join in the debate for FXOpen NZ, I would like to help you with this question.

Please take a look at FXOpen AU's Product Disclosure Statement. http://www.fxopenaus.com/Download.aspx?name=FXOpen_Product_Disclosure_Statement.pdf

On page 26, some LPs are named (They can be subject to change). FXOpen AU shares some of these LPs with FXOpen NZ and FXOpen NZ can be one of the LPs for FXOpen AU and vice versa. The ECN model is explained in detail in this document as required by ASIC and Australian Law. This ECN model is pretty much the same as used by FXOpen NZ.

PS. By issuing the PDS here, it is by no means to be considered a recommendation or sale and that your personal financial needs may not be taken into account.

I see. Well I stand corrected on that point at least. Thanks for the info...

 

[FXCobra]

While I am not supposed to join in the debate for FXOpen NZ, I would like to help you with this question.

Please take a look at FXOpen AU's Product Disclosure Statement. http://www.fxopenaus.com/Download.aspx?name=FXOpen_Product_Disclosure_Statement.pdf

On page 26, some LPs are named (They can be subject to change). FXOpen AU shares some of these LPs with FXOpen NZ and FXOpen NZ can be one of the LPs for FXOpen AU and vice versa. The ECN model is explained in detail in this document as required by ASIC and Australian Law. This ECN model is pretty much the same as used by FXOpen NZ.

PS. By issuing the PDS here, it is by no means to be considered a recommendation or sale and that your personal financial needs may not be taken into account.

No, don't imagine you marked any positive point for fxopen in this case if you just show us(too late anyway!) your LP names.

I had similar case like Kovacs with one of my brokers and ECN broker too who fixed price feed error and all affected orders returned to normal, without the broker blaming the LP and hiding behind it to loose me money.
When there's another case with another broker and it acted fairly not like you had done, then we can build on it to show how Good Brokers deal in such case.
We do not build on brokers actions who defend themselves & LP with some disclosure/agreement but brokers who raise above their personal & LP interests in favor of its clients interest and benefit.
That is a broker I can trust and open a live account with which is never the case with fxopen who cheated its client and my past posted chart of how fxopen manipulate market prices through market hours compared to other brokers prices is an additional point against you fxopen.
So your LP & agreement excuse to cheat clients is refused in sentence and details.

You still never announced that you'll charge your LP because it hadn't happen that 2 "sharks" fight for a client benefit.

Instead, you threatened Kovacs to sue him if he continues with this case.

So fxopen liquidity providers are:

LMAX; London Capital Group; Renesource Capital; Gain Capital; Alpari; and Hotspot via FIXI

I said it before that I care less knowing the LP names if you as a broker fix your LP fault and not hide behind some disclosure to defend yourself and it.

""While I am not supposed to join in the debate for FXOpen NZ""

Really?!!, then raise your phone and call FXOpen NZ Representative(for sure you know the person), asking him/her to join this thread discussion or they think themselves in a degree above all of us here at ForexPeaceArmy, and that they are above any criticism!!!!!!!!

Fxopen GUILTY for all reasons mentioned before and in this comment.

 

[Lohkamp]

Hi all,

as I want to see a bit clearer in this case discussed here, please tell me:
Does Mr. Kovacs suffer a loss after his trades, executed at wrong prices, were removed? I mean, is his account balance now less than it was before he started these trades?

According to FXOpen`s LPs:
Normally an ECN Broker has also some well known banks like for example JP Morgan etc.

 

[RahmanSL]

What really baffles me is:

4,585 viewed this thread, and only 145 voted (120 Guilty - 25 Not Guilty) representing just 3.16% of total viewers.

Because of the relatively low numbers of voters, this also brings up another question on the actual numbers of active FPA members.


....and I am still not quite clear on exactly what we voting here and, thus, is still abstaining from casting my vote.
If it's to declare FxOpen a scam broker, that word "scam" is being used in a rather generic manner and doesn't quite suit the issue here anywhere.


Any clarification(s) from AssistantModerator would be most welcome.

 

[Onyebuchim C. Obike]

No, don't imagine you marked any positive point for fxopen in this case if you just show us(too late anyway!) your LP names.

I had similar case like Kovacs with one of my brokers and ECN broker too who fixed price feed error and all affected orders returned to normal, without the broker blaming the LP and hiding behind it to loose me money.
When there's another case with another broker and it acted fairly not like you had done, then we can build on it to show how Good Brokers deal in such case.
We do not build on brokers actions who defend themselves & LP with some disclosure/agreement but brokers who raise above their personal & LP interests in favor of its clients interest and benefit.
That is a broker I can trust and open a live account with which is never the case with fxopen who cheated its client and my past posted chart of how fxopen manipulate market prices through market hours compared to other brokers prices is an additional point against you fxopen.
So your LP & agreement excuse to cheat clients is refused in sentence and details.

You still never announced that you'll charge your LP because it hadn't happen that 2 "sharks" fight for a client benefit.

Instead, you threatened Kovacs to sue him if he continues with this case.

So fxopen liquidity providers are:

LMAX; London Capital Group; Renesource Capital; Gain Capital; Alpari; and Hotspot via FIXI

I said it before that I care less knowing the LP names if you as a broker fix your LP fault and not hide behind some disclosure to defend yourself and it.

""While I am not supposed to join in the debate for FXOpen NZ""

Really?!!, then raise your phone and call FXOpen NZ Representative(for sure you know the person), asking him/her to join this thread discussion or they think themselves in a degree above all of us here at ForexPeaceArmy, and that they are above any criticism!!!!!!!!

Fxopen GUILTY for all reasons mentioned before and in this comment.

I quite agree with you here. Its what i technically inquired from them "Who gets the blame when hitches come from their end and whats the compensation?" They never went straight with an answer. I think they (FXOpen) should have punished or fined their LP for issues like these and make neccessary compensations or right adjustment in a customers account. This shows transparency and build customers confidence.

Both parties have rights to SUE but the regulators would make a big difference here if they step in.

 

[4evermaat]

Dear Sirs,

The discussion of an individual case has grown from everyday practice of Broker-Client relationship into a dispute about problems of ECN model functioning as such. I suggest continuing our communication on the theory of organizing ECN and the use of its practical aspects in the specially dedicated to this topic section........

I would appreciate if fxopen would offer their interpretation of what ECN model of offering OTC forex between client and broker is. I think this is at the heart of this whole issue. Most people here are under the impression that what prices they see reported on the client terminal are tradable.

The company asserts that the results achieved in this account were obtained only because of technological glitches. Otherwise, if the client had the great skill of trading, he could be able in the short term earn the amounts that would multiple times surpass the discussed values. Thus would bring substantial profits to himself and the Company.
......
With all the respect to the participants of the forum, once again want to inform you that the removal of transactions that were executed at prices later recognized as not by market price at the time of execution is a significant point of the agreement with any of the Liquidity Providers. This is the reality of the OTC FOREX.

Regards,
Denis Peganov

I agree that if the profitability was due skill of the trader, then he should be able to repeat these results with fxopen or any other broker again with little problem. It shouldn't be a 'one time only' deal.

However, if this was a platform glitch that affected all clients during that timeframe, was an email sent to all clients informing them of the glitch? I would think that a technical error that easily affected all retail participants would have warranted an immediate email after the problem had been confirmed.

Spending 5 minutes to draft an email detailing a confirmed problem and send it to all your affected clients would have saved you all these hours now trying to defend yourself after the fact. A lot of brokers seem to have this problem of not wanting to send 'important' emails to their clients. But promotional emails are ALWAYS delivered in a timely fashion. A trader is always interested in any news that affects the technical aspects of their ability to trade. An LP sending out erroneous prices is definitively worthy of a 5 minute email from a supervisor. Do you disagree with this?

 

[4evermaat]

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...

When FxOpen ECN was in its early stages, it was Dukascopy who was their primary LP. You could actually contact Dukas for mt4 offering and they would refer you to FxOpen ECN.

But they have replaced Dukascopy for a while now as LP; who knows who the mystery LPs are now. Some brokers tell, some brokers don't tell; to each their own. The case isn't about whether FxO was required to disclose their LP to the public, Koviaks, FPA, etc.

 

[4evermaat]

While I am not supposed to join in the debate for FXOpen NZ, I would like to help you with this question.

Please take a look at FXOpen AU's Product Disclosure Statement. http://www.fxopenaus.com/Download.aspx?name=FXOpen_Product_Disclosure_Statement.pdf

On page 26, some LPs are named (They can be subject to change). FXOpen AU shares some of these LPs with FXOpen NZ and FXOpen NZ can be one of the LPs for FXOpen AU and vice versa. The ECN model is explained in detail in this document as required by ASIC and Australian Law. This ECN model is pretty much the same as used by FXOpen NZ.

PS. By issuing the PDS here, it is by no means to be considered a recommendation or sale and that your personal financial needs may not be taken into account.

Thanks for this update. It came a bit late, but better than never. This has certainly been a learning experience for FxOpen, especially as they face tougher regulation moving forward from this case. The turnaround time for discovering price feed errors will have to be a lot sooner (1-24 hours of error), among other things.

 

[along]

You start with balance usd600, making big trades from 18.05 to 18.30. in less than 25 minutes more
than 600 lots traded and more than 50 trades with no single loss on it ? wow....
40k in 25 minutes, superman !!

600 lots assuming with 3 pips spread that will give a broker about 18k in commission,
fxopen should be glad to have you....