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NOT GUILTY Case# 2011-010 | babadan vs www.forex-swiss.com

Discussion in 'Not Guilty Verdicts' started by babadan, Feb 7, 2011.

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Based on the available evidence, do you believe that Forex-Swiss is guilty?

Poll closed Mar 20, 2011.
  1. Guilty

    23 vote(s)
    44.2%
  2. Not Guilty

    29 vote(s)
    55.8%
  1. diegoman

    diegoman Recruit

    Joined:
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    Reason For Voting Guilty

    Hi everybody.
    I am a financial oriented lawyer and I have won a similar sue in my country Argentina against a BBVA Mutual Fund, last year.
    The standards of the financial laws in my country are similar to the rest of the world, and were dictated by the IMF and other "organisms" like it, so I think those principles can apply here.
    In order to not bother the rest of the participants I will concentrate the effort in explaining which is [from my point of view] the main principle to attend for the solution of this case.
    The most important topic in the financial service relationship in order to the liability is the "INFORMATION OF THE CLIENT". It doesn`t matter if the client is a professional [trader, in this case] or not. All the laws I know assume that the Broker (or fund, or administrator of the fund) is a professional with enough experience to embark in this kind of businesses.
    I share the point of view of some other FPA "commandos" stated above, in order to ask the petitioner to explain "Why he continued trading when he knew that the Broker was not acting according to the contract terms?". Well, I don`t know why the petitioner did so, but I think that is irrelevant to this case`s solution. I`ll explain why.
    The contractual relationship between the broker and the client is not equal, because the broker dictates all the rules and the client simply sign the contract, there is no possibility of discussion of terms at all for him. The broker has the power to freeze the client`s account, but the client can`t freeze the broker`s. The broker can execute an order, and the client just can give that order in the hope that the broker will fulfill it. Those are just examples.
    In this context the broker MUST provide the client all the needed information (previously to the sign of the contract), and all the relevant requested information (once the contract is in execution). The broker MUST act according to the information provided to the client previously to the act of signing or applying, BECAUSE that information is the reason behind the decission of applying.
    In this case the broker violated the previously informed terms at least twice, first when informing that scalping was allowed and then forbidding it by the way of applying any form of restriction (minimum size of a lot), and then, the Broker accepted its mistake and so reduced the size of the lot from 1 to 0.5. BUT that reduction, even accepting the "mistake" was still a violation of the previously informed contract terms.

    SO I VOTE "GUILTY".

    And the Broker must refund proportionally 90% of the losses suffered by the petitioner before the reduction of the lot from 1 to .5, AND 80% of the losses suffered by the petitioner after that reduction. In both cases the 10% of the losses before the reduction of the size lot from 1 to .5 must be supported by the petitioner, and also the 20% of the losses suffered after the reduction of the lot size.
    That`s my vote.
     
  2. RahmanSL

    RahmanSL Major

    Joined:
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    Since there is no signed, dated, and witnessed T&C before signing of agreement, that would leave the door wide open for dishonest brokers to add in anything they like and claimed that was there all along; correct?
     
  3. Teodor Jackson

    Teodor Jackson Sergeant

    Joined:
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    I do agree to the logic.

    However the problem is Babadan main accusation is about unauthorized change of his order lot size which resulted in his excessive loss.
    While all looks it is only his software to blame.

    Babadan, we asked you about logs - you didn't answer.
    There is a proof in the logs and you may still have them - they remain even if you uninstalled the MT4. Did you look for them?
    I also asked you how many profitable trades you did before the loss happened. You didn't answer.
    Actually many people asked you simple questions and didn't get any feedback from you. I guess this contributed to the case outcome.

    As to the broker itself - yes, I advised Babadan to open a case against the broker on violation of the rules, promises and affirmations. But I can hardly see any refund based on this alone.
    I'm not a lawyer - I cannot say if their Customer Agreement complies to superior rules in their jurisdiction. While they excluded their responsibility for informing up front about the trading conditions there.
    Maybe this could be the case.
     

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