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

[dbrawner]

I'm having a hard time accepting their defense... How can any customer see (let alone later prove) what the bid/ask was by a particular broker (and from it's LP) at any given past time of sale beyond what was presented to them on the broker's platform? And why should the quote ever be something different than that displayed on their platform?

Using such an excuse as "technical difficulties" to explain (fabricate) price disparities is so very conveniently in favor of the broker. The plaintiff's posts show trades that were accepted by the broker's trading desk, executed, and confirmed at the prices.

Their "get out of jail" clause (Clause 6 I think?) not withstanding, if there are discrepancies between what was accepted, executed, and confirmed and what was available to the broker by the LP, that should be between the broker and the LP, NOT the customer (unless someone can prove the customer had knowledge of such price discrepancy when placing the trade... i.e. some kind of complex arbitrage strategy was being employed).

Unfortunately, as in most customer contracts, the contract language is crafted by the firm's lawyers to favor the broker, not the customer, and; whether morally or ethically right or wrong, the proof of any deception lies with the customer.

Therein lies the rub... It will be nearly impossible for a customer to obtain any verifiable log or quotes between the broker and it's anonymous LP. Commented server logs are NOT proof of anything as they are simply text files that are easily edited before presentation.

This is another example of the value FPA provides to the trading community if traders will only avail themselves of it during their due diligence rather than trusting the slick advertising or whatever intuitive process by which they select the most critical element of their trading environment. I check here first before buying or considering business with ANY forex vendor (including systems, software, brokers, etc.) It has alerted me to potential issues more times than not and I suspect has saved me countless dollars and hours of frustration.

All that said, I deplore tactics by broker's who hide behind contract language designed to protect their firm against outright fraud. Technical "issues" and commented server logs are insufficient "evidence" to use against a customer's complaint. Add to this an apparent history of this behavior and FXOpen will get a guilty vote from me...

 

[Sazu]

So I am curious, just how do you find companies like this? Are they recommended by a friend or someone you trust or just from searching the web? There has got to be some underlying cause for effect here that should be looked into, once this is identified then perhaps a cure can be thought of after all $40,000 is not chump change and if someone you trust is advising you to go with a certain company or person then perhaps it is time for new friends!

 

[RahmanSL]

"So I am curious, just how do you find companies like this? Are they recommended by a friend or someone you trust or just from searching the web?.............and if someone you trust is advising you to go with a certain company or person then perhaps it is time for new friends!"

This is EXACTLY the reason why senior FPA members do not openly recommend broker(s) to Newbie Traders.

I really hope FxOpen will, and can, come up with some compromise to settle this case as it surely will hurt their reputation if they choose to ignore and hope this case will simply quietly slip away on its own.
This case will come up for vote if it is not tackled soon.

 

[Boko Maru]

Would hope this is up for a vote soon, as it would be easy. I have never accepted this bullcrap from brokers about trades executing at "prices that don't exist." WTF?? All a trader can ever do is click "buy" or "sell". They get filled at whatever price the broker gives them. What is a trader supposed to do then? Say, "oh, I see this price is actually non-existant, so I won't click on it", or "gee, I see the price I got is a non-existent price, so I will close my trade"?? It's utter nonsense.

Also very convenient that they say they won't reveal who their LP is. I can almost guarantee you they don't even have one This is classic market maker, "trading against you" kind of stuff by a bucketshop...

 

[joby]

This may happen, I am a victim of ufx markets. They cheated me , still trying to contacting them to get my money back. Please advise me to how can I get my money from UFX markets. I wish you will get your money get back soon

 

[Lanzo]

It is a sad situation; some brokers always see traders as vulnerable and unprotected by any law if that even exist. Let us be careful of all these unregulated brokers who claim to be registered.

 

[ForexVerified]

Let's see. Every trade opened and closed in less than 1 minute. Every trade insanely profitable, and you turned $1,000 into $44,000 in just one day. Are you guys kidding me? How does this even get put up for a vote? FX Open's services were obviously abused and I wouldn't let him keep that profit either. You can't take advantage of delays in the quotes or technical issues and expect to get away with it. If you could, every broker would go out of business instantly. This is a joke.

Scott

 

[Boko Maru]

Let's see. Every trade opened and closed in less than 1 minute. Every trade insanely profitable, and you turned $1,000 into $44,000 in just one day. Are you guys kidding me? How does this even get put up for a vote? FX Open's services were obviously abused and I wouldn't let him keep that profit either. You can't take advantage of delays in the quotes or technical issues and expect to get away with it. If you could, every broker would go out of business instantly. This is a joke.

Scott

If all of this profit was obtained in one day, then that is a bit suspect, but I don't see it as "abuse" by the trader for the reasons I mentioned above. What else is a trader supposed to do but click buy or sell? What FxOpen referenced in their email was that an LP was providing erroneous quotes, and that was the reason for the profitable trades. But is it the trader's responsibility to just not trade then? How is he to know they are erroneous prices (if in fact they were which is unknown)?

It's the broker's responsibility to ensure the prices trader's are clicking on are actually correct. If they are not, then the broker stands to get wiped out for sure, but again whose fault is that? The trader's? I don't think so. The quotes may well have been erroneous, but the question is who pays for that, the broker or the trader?

"Taking advantage of delays in quotes" is simply arbitrage and it happens every day in all financial markets. If FxOpen doesn't want to lose money that way, then they need to make sure their quotes are not delayed. But I'll just come back to the same thing again. If a quote is "delayed", what is the trader supposed to do then? Sit there and wait until the price is not "delayed" before clicking it??

Again, it's the broker's responsibility to ensure everything is operating correctly. If it isn't for whatever reason, then it's the broker that should experience the pain and not the trader. My opinion at least...

 

[Pharaoh]

Read the original discussion thread in Scam Alerts. FxOpen said that the unnamed LP deliberately provided incorrect pricing information.

If this had been a simple pricing error, I'd say that FxOpen cancelling the trades would be a very reasonable solution. Since this appears to be a deliberate, fraudulent action on the part of the LP, and since FxOpen won't name the LP, then I believe FxOpen should honor the trades and take action against the LP.

 

[fkayode]

How can a broker hold trader responsible for the deficiency of their LP?
I need to know whether all losing trades were reversed on this particular day and time.?
It does mean that one can no longer trust the prices given by this broker.
Now it is either one close his account and move to a better and more trusted broker than have your money with fxopen.
I will advice fxopen to honor this payment than having their name destroyed, because it will cause them more to build their reputation and the money they are to pay Kovacs
It is more easier to destroy than to build. A word is enough for the wise