PENDING RESOLUTION Case# 2012-092 | Rajivxxx vs Liteforex.com

[FreddyFX]

Hmmm.....what to think ???

The best trades are made during news releases.
So why go for a broker that does not allow this ??

 

[pianoman959]

Having read through the entire terms of use, there is no doubt in my mind that this broker is a scammer. However, the terms of use (which are clearly unreasonable) do govern the contract I assume under the laws of Russia in this case. While shocking the following questions should be asked to determine whether the terms of use were violated:

1) Para 6.2: Regarding the transactions, was a "claim" filed in writing with LiteForex within 3 days? (Absolutely ridiculous I agree, but that is the terms that were signed).
2) Para 6.3: Was an e-mail send to the Security Office at amlpolicy@liteforex.-com?
If so, was any information disclosed before the examination ended (they have 14 days)?
3) Para 6.5 and 6.6: Was strong emotion, an insult, or a obscene word anywhere in the "claim"?

Without even getting to the news trading, if any of the above was violated then per the terms of use the claim can be rejected.

I did notice that every transaction was a minute or less from open to close. This is obviously going to raise red flags at any broker who discourages or disallows scalping. I also noticed that the 10% threshold profits related to the account balance was not met by 2 transactions. However, Para 6.8 gives ForexLite to adjust this percentage to anything they want arbitrarily.

The concept of "generally accepted market practice and ideas of a fair settlement of a dispute." may be radically different in Russia than other parts of the world. In this case LiteForex did spell out what they could do in writing. To me, I cannot call someone a scammer when they exercise what they said they could do in the contractual documents.

My final comment is that I personally think this company has some terms-of-use that are highly unfavorable to clients. I cannot go as far as saying they are scammers unless I am shown that their terms of use have been violated which is why I raised the questions above. In my opinion, it is clear to me that this ForexLite like many brokers does not want and does not encourage scalping. It would be nice if they outright said that rather than burying provisions in their terms of use that are "gotchas" for those who scalp.

Good trading y'all from Texas

 

[PetDane]

If you had lost on news trading would they have cancelled the loss! If they accept your trade in the first place they should pay out if you win - if they don't want the business they should reject the trade when you try to place it, anything is a swindle! Tyhe truth is that they never passed trade this on as if they had they would have had the profit to pay you and still had their share of the spread!
Don't trade with brokers who don't accept all kinds of trading they are looking for excuses to cheat!

 

[John Naluswa]

Nothing says news trading is prohibited. It does say they can remove some profit made during news time though.. he is the exact wording.

This clause can be interpreted in any way they want. The best trades come after news releases, and with this clause, your money will always be with held.

 

[PaladinFX]

From the clause mentioned, it clearly states that news trading is not allowed on their platform (unless they changed the clause after the customer made profits).
Given the above, I'm not sure if the case will be Rajiv's favor for this fact alone. Also in all fairness, they did process the withdrawal of the initial deposit of $100.
It is true that the devil is in the details and the T&C's are written just to put off reading so when instances like this happen, the broker can always refer back to the TC and ask why the trader didn't read them.

Yeah, concur.
If one doesn't like a broker's ToC, one shouldn't deal with them.
Once more shows the importance of actually reading the Terms, even though it surely is tedious to do so ... but it can save you a lot of grief.

I had to hunt on their website real hard to even find out what jurisdiction they are under and eventually found a press release about them being in Russia. Russia, Eastern Europe, Mediterranean, Latin America or the Caribbean........... STAY AWAY. Do NOT invest with ANY brokers from the above regions. You are just begging for trouble. Stay with USA, Canada, Australia and Western Europe regulated brokers and you will at least have SOME level of protection. Russia and Eastern Europe brokers are just plan thieves.

That's what I keep preaching to people on various fora ... some just don't want to listen, are lured by large leverage, bonus or whatever ... and then pay for it later.

I wish you luck with your case, but doubt that you'll win this one.


Cheers,
P.

 

[Thai_trader]

I think that this clause is under-handed but needs to be kept in context. They are saying if you make LARGE profits during news spikes that they could reduce those profits. In this case, the trader took a $100 and made $40 during a news spike trade. That is 40%. This broker is a MM and as such they need to limit their risks during high volatility times (ie news releases). If your entire strategy is based on trading news then this for sure is not the broker for you. They make it quite clear in their terms.

Other brokers make it quite clear as part of their marketing that they do accept news trading and some will say they accept scalping while yet other brokers (like liteforex) will not honor trades are opened and then closed in under 2 mins.

These are terms that traders need to be aware of before placing their funds in the hands of the broker. After the fact it's too late. Do your homework and make sure your broker is the right environment to trade your strategy.

 

[Onyebuchim C. Obike]

Due diligence

Its quite unfortunate and its going to be a difficult case.

This is why i'd suggested traders should do a lot of due diligence on Brokers before jumping. It pays to ask brokers questions on your aspirations, trade plan, technology (EAs & Indicators), expectation, e.t.c. through direct communication or emails.

Also you can throw up their response to a forum like this and get other trader's ideas and experience.

Issues that has to do with Brokers TOS is very hard to deal with after an issue has occur before getting to know.

News trading has always been an issue with brokers due to liquidity and unpredictable marker surge that can give brokers room to claim server issues or price feed issues.

 

[Jim Ballou]

I am confused on how I am to vote? Do I vote that he should get his money back or vote against him because he didn't read the TOC? Are we to vote on every case brought before the court when a trader is the guilty party? I am not trying to put myself above Rajiv, but we as traders have to ask ourselves...was I a dumb bunny!

 

[Onyebuchim C. Obike]

I am confused on how I am to vote? Do I vote that he should get his money back or vote against him because he didn't read the TOC? Are we to vote on every case brought before the court when a trader is the guilty party? I am not trying to put myself above Rajiv, but we as traders have to ask ourselves...was I a dumb bunny!

I quite agree with you here. Although i think the FPA as first haven is trying to give traders open alms to solving issues like this. Although some cases ought to be filtered.

In my view i'd suggest they (FPA) broaden or suggest criteria for voting. E.g Did the broker fail to inform the client before taking decision? Did the broker fail in keeping to financial regulations concerning the issue at hand? Should the plaintiff be paid full money including profits made? Was the plaintiff ignorant of the TOS?, e.t.c, e.t.c, e.t.c.

Points should be awarded to these votes (criteria) which would help in clarifying votes and help to narrow a decision.

Just my thoughts.

 

[PaladinFX]

I quite agree with you here. Although i think the FPA as first haven is trying to give traders open alms to solving issues like this. Although some cases ought to be filtered.
In my view i'd suggest they (FPA) broaden or suggest criteria for voting. E.g Did the broker fail to inform the client before taking decision? Did the broker fail in keeping to financial regulations concerning the issue at hand? Should the plaintiff be paid full money including profits made? Was the plaintiff ignorant of the TOS?, e.t.c, e.t.c, e.t.c.
Points should be awarded to these votes (criteria) which would help in clarifying votes and help to narrow a decision.

While this would surely improve the 'quality' of the votes cast, it sounds rather difficult to implement.

It would surely be useful for a case like this one here ... but bearing in mind that most cases deal with a broker refusing to execute a withdrawal or behaving dishonestly in one way or the other, it would IMHO not justify the effort of fine tuning the voting process.

Most cases are pretty clear cut, aren't they?


Cheers,
P.