In this case, the functioning of FxOpen's ECN model is critical to the issue at hand. I'd be more than happy to discuss ECN functionality elsewhere, but there's no way to exclude some talk of it from this conversation.
Possibly true. This overlooks the ethical issue of allowing a rogue LP to wreck a client's trades.
If the errors are accidental, I'd be 100% behind you. Per statements from FxOpen in the Scam Alerts folder, the errors were NOT accidental.
Laudable, but insufficient considering the actions of the LP in this case.
I'd be much happier of FxOpen had said "We are taking steps to change NDAs so that FxOpen no longer protects LPs that use cheap bucketshop tactics against our clients" instead of hiding behind agreements that do nothing to protect a client from these sort of tricks.
Funny how many other brokers brag about who their LPs are.
A client of FxOpen got screwed out of profits due to the deliberate unethical actions of an anonymous LP. FxOpen hides behind it's own TOS and an NDA. The client is rightfully unhappy and complains in public.
Based on this, FxOpen is threatening to SUE.
I consider this threat alone enough reason to recommend against ever doing business with FxOpen. I strongly suggest that FxOpen immediately withdraw this threat.
Why not just insert an item in your TOS stating that unhappy clients surrender all rights to ever complain in public?
Technical glitches or deliberate acts of the LP? Let's see what's been said about this elsewhere:
So LP deliberately injected quotes to "attract liquidity". Were these prices ever real market prices?
Looks like the LP was providing "non market quotes". Sounds like false prices and cheap bucketshop tactics to me.
Nice, just slap your client in the face while you're at it. Is "service with a snarl" now FxOpen's policy for dealing with unhappy clients? And you've got the nerve to accuse him of "black PR".
Once again, had this been a simple technical glitch, then FxOpen's actions would have been 100% correct. Then again, even if this had been a simple technical glitch, threatening to sue because a client was made very unhappy by it is one of the absolute worst customer service moves I've seen in a very long time.
Since it appears that FxOpen has clearly admitted that an LP was acting not just as a market maker, but was deliberately providing fake prices to lure traders in, the client has every right to be unhappy. He also has every right to let other traders know what happened.
My recommendations if FxOpen wants to try to restore their reputation:
1. Withdraw any legal threats immediately.
2. Begin negotiations with their LPs immediately, with the goal to end NDAs within 1 year. Other brokers brag about their LPs. Considering what happened, FxOpen should seek full transparency if they want to call themselves an ECN.
3. Offer Kovacs some reasonable level of compensation and a proper apology for what happened to him.
Dear Pharaoh,
With all my respect to You kindly read following without emotions and try to understand our position based on the facts and business terms.
:
1. The company has not broken any paragraph of the service agreement (agreement which Client signed and accepted)
2. The Company took over the losses on the given transactions, which resulted from the execution trades on the account of the Company at the Liquidity Provider. Please be aware that The company has never claimed that one of our Liquidity Providers changed the results of the transactions. In our letter the following was written to the Client: «In reply to your enquiry, please be advised that due to the technical problems experienced by us on May 16, 2012, some trading orders were executed at the prices not existing on market at that period of time. The origin of these problems was that we had been receiving the erroneous prices from one of our Liquidity Providers...» Therefore the Company reported that the prices supplied by one of our Liquidity Providers were not by market. The system blocked these prices and they did not fall into the Depth of Market - it is clearly seen in the server logs, which were provided to the client.
3. The company throughout the dispute provided the Client and the forum community with the comprehensive information presented in a proper manner.
4. The company asserts that the results achieved in this account were obtained only because of technological glitches. We have a right to say it because we can see Trading History on Mr. Kovacs account. It doesnt contain similar success periods when during a couple of hours was achieved result with several hundred % of profit.
5. We believe, that if Mr. Kovacs' main complaint’s target is to "return voided profit", then he has all the power and chance to contact our regulator (if he believes that FXOpen did an illegal action).From our side, we have faced a loss which we compensated (1800 USD) on a good will. We would like to post once again that we are absolutely right from the legal, business, professional and ethical sides of this dispute, we are unhappy that this situation happened, but this is a common situation in OTC FOREX business (rarely happening with FXOpen), which is solved according to the Agreement signed between the Company and the Client in a respectable manner with the losses taken from our side.
6. We and myself personally never threatened FPA, this case is between Mr. Kovacs and FXOpen only and FPA is just a public board for it. More to say, I was one of the few persons who was defending FPA in numerous Russian forums (sometimes even warned by Admins) against other companies threats.
Actually this is Mr Kovacs who is trying to threaten us with his latest email using FPA name for this. All we try to say is that Mr Kovacs' activity is illegal and indicated as blackmailing, instead of legal actions against FXOpen he decided to threaten us with FPA name in his e-mails. Do you think it's logical for the person 100% sure that he is right? Would you support such threats?
7. FXOpen has obtained a license from ASIC and 2 more respectable regulations on the way, isn't this trustable enough? Do you really think we would be able to pass audit or gain a license with any "black" or illegal activity?
Dear Mr. Paharaoh, FXOpen has grew from a small offshore company to a multinational Forex Broker, we have done many changes and upgrades. FXOpen's technical solutions are one of the most innovative and fair for the traders in this market, that’s why so many professional and profitable traders joined us in the past 2 years. The last thing we want to do is to damage our business, and of course we would not do this for 40K.
Any decision should be based on the facts and ALL facts show that FXOpen didn't do anything illegal in this situation, any decision based on the emotions or blackmailing is illegal and unprofessional.