Pepperstone scam

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shortcake

Recruit
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4
I opened an account with Pepperstone on the 7th September believing they were ECN brokers, not money markets and would not trade against me. I believe now that perhaps they are not.


On the 18th September I was doing well since starting I had made £3700. Then they closed my trades on a margin stop out with an unusual high spread and the instant they did it the price went back in my favour and I would had made a couple of thousand. I asked them for a copy of the liquidity receipt but they state that:


We cannot provide you with a trade receipt as requested. Dark pooled liquidity can't provide trade receipts as that would defeat the purpose of this form of trading …

THIS IS A FANTASTIC COVER TO TRADE AS THEY WANT AS THEY CAN NOT PROVE IF THEY SENT YOUR TRADE TO MARKET OR NOT!


I was using the ctrader platform and they told me that as I kept doubling the trade that they had to close all of my 13 trades 4096oz of gold instead of only about 100oz cT_cs_1010417_XAUUSD_2015-09-24_11-53-25.png cT_cs_1010417_XAUUSD_2015-09-24_11-53-57.png cT_cs_1010417_XAUUSD_2015-09-24_11-56-17.png cT_cs_3133004_XAUUSD_2015-09-24_11-54-34.png trade closure pepperstone 18sept.png that was necessary to bring me back within the margin. This caused over a 5000 loss that was unnecessary plus a few minutes later I would had made a couple of thousand profit! With the double up option on the platform they are still individual trades when you look at the details as that have their own number and price. They are also kept separate as when you part close a group of trades like this the average open price is changed to reflect the trades that are used to close the position and also the average price is changed on the group of trades that are left in the same manner. Therefore there is no reason why it cannot just close enough to return the account to above the margin stop out. Also this is under Pepperstones terms and conditions:


6.1 Our margin requirements apply throughout the term of each Contract. It is your responsibility to ensure that the Required Margin is available on the Account at all times. We may or may not notify you that the Actual Margin is less than the Required Margin. If, at any time during the term of a Contract, the Actual Margin is not sufficient to cover the Required Margin, you must Close-Out open Contracts or transfer adequate funds to us. Such transfer must be effected and documented immediately after we request you to do so. Even if you effect such transactions, we may do one or both of cancel any Orders or Close-Out one or more Contracts or part of a Contract at our sole discretion without assuming any responsibility towards you for such action.

I can not see any benefit for the trader for the platform to close all the trades on a margin stop out when only a little is needed. It is quite simple to program this to close only what is necessary, the only benefit is for the broker especially if they are trading against you! I did contact Spotware the designers of ctrader to see who is responsible for deciding how margin stop outs work but got this reply:

Unfortunately, we do not provide direct platform support to traders. We are a technologies company who provides services to brokers and banks.

Clearly this means they design it for brokers and banks not traders!


Another interesting point is that when I took a chart shot at the moment the trades were closed, I happened to do so on separate laptops and noticed the charts were different, I therefore opened the platform a couple more times and did the same time chart shot- see attached. All were different, I had to send these on an email many times before I got an answer and then the first answer was:


Different brokers usually have a different mix of liquidity providers meaning that the highs and lows can be slightly different.

So I had to tell them again that were all from their own Ctrader platform which was obvious from the charts and also I told them so when I sent them, the next answer was:


Our cTrader and Pepperstone platform reflect the same pricing. This is the only way that you can view our pricing.

Which again is not an answer so I sent again and this was the next answer:

Tick charts are notoriously difficult to graph (part of the reason they are not offered by MT4).

There were other areas that I had to keep sending the same question before getting any answer or a satisfactory one. I have never had an answer to whether they have A and B books and trade against you. This occurred on the 18th September and I have been back and forward to them since then, passed between different people etc.


I should had been more alert as on my first day of live trading with them when there was a mistake. Firstly my spread was 6 pips higher on gold than with my demo account and on Live chat I queried this and they said there was a mistake but didn’t know how to correct it but would look into it and get back to me which they never did however I decided to trade, I was only doing small trades and left a small trade protected with a stop loss of about £3 when I had to go out. That day trading closed early at 18.00 and I came back a little after and saw the closure loss of £41.22 on my account with the closing price of 1131.76- the price should had been only about 1119. The trade was actually actioned at 18.00.28 just after the market closed. I obviously queried this and they admitted it was just from a bad tick and they refunded the money.


Therefore I would like your opinion especially as to whether they are a and b brokers also can they supply liquidity tickets under a dark pool. Otherwise how can they prove they are not trading against me, this seems a good excuse to do as they please. Should they also refund my money as there terms say they can close out some or part of trades . Also they actually closed the trades at the time the price was at the highest( margin 47.68%) before it went back down instead earlier when it lower when it would had hit the 50% margin stop put- see the trade closure statement:


Stop-Out: Balance=8676.18, Equity=3577.59, Total Margin=7502.33, Stop-Out Level=50%, Margin Level=47.68638542959321%

I also believed the margin stop out was 20% and you got a margin warning at 50%. See this excerpt from Pepperstone’s website:


Can I get a Margin call if I have no free margin?

No. Your free margin can become a negative figure. Your trades will stay open until your available EQUITY level (also indicated in the MT4 terminal) falls to 20% or less of the required margin to open the trades. If you see the previous example in this FAQ, the trade opened with a margin requirement of $70.89 would not be subject to a margin call unless the account equity falls to $14.18 or less.


This was Pepperstones reply:


The best place to find information on our product offerings and margin information is called the PDS and is available at the bottom of each page of our website, as well as during the application process. Section 15.8 details the margin stop out levels for MT4 and cTrader:


15.8 Benchmark 7 - Margin Calls


Pepperstone operates a Margin Call and Margin Stop Out systems designed to prevent clients from

entering into negative balances on their trading accounts. The system is automated and will monitor

every client account while the forex markets are open. Margin is monitored as a percentage and

calculated as follows:


Equity / Margin = Margin Percentage


Each trading platform offers a different Margin Call and Stop Out system.


Metatrader 4


With Metatrader 4 should the Margin Percentage fall below 90% it will automatically trigger a Margin Call.


A Margin call is displayed to clients in two ways:


a) The trading platform will indicate the margin call by sending an internal email to the client’s trading

platform software and providing an audible announcement of the mail’s arrival.


b) The area of the trading platform that displays the clients’ balance and equity will flash red.

Should the Margin Percentage fall below 20% the trading platform will automatically trigger a Margin

Stop Out. This will begin to close open positions until the Margin Percentage rises above 20% again.


cTrader


cTrader does not currently have a Margin Call system built into the software. It is your responsibility to

monitor your margin through the trading platform.

The cTrader Stop Out system will activate at a Margin Percentage of 50% or below. At this point the

trading platform will automatically trigger a Margin Stop Out.


I think wherever the margin call is referred to on their website they should state the difference between which platform you are using. I felt it is unfair that one platform should have a different margin to another with the same company and asked several times why this is so and could not obtain any proper answer- sometimes thy would say it was their liquidity suppliers that set the margin and other times it was their management. Clearly they do not know themselves!


I HAVE NOT OBTAINED SATISFACTORY ANSWERS AND HAVE BEEN PASSED FROM ONE ADMIN CLERK TO ANOTHER WHICH IS TOTALLY UNPROFESSIONAL. IT IS INTERESTING VIEWING TO WATCH AN INTERVIEW OF OWEN KERR THE CEO WHO STATES THAT CUSTOMER CARE IS OF THE UPMOST IMPORTANTANCE AND ALL PROBLEMS AND COMPLAINTS ARE DEALT WITH IMMEDIATELY. I HAD TO WAIT SOMETIMES OVER A WEEK BETWEEN REPLIES- I HAVE RECEIVED 17 FROM THEM AND THERE AS BEEN OVER THAT TO THEM AS I HAD TO RE-REQUEST ANSWERS.


The video link: https://www.google.co.uk/url?sa=t&r...6f3WHrxa3rBBeayZnx_XQA&bvm=bv.108538919,d.ZWU


Plus the transcript of the video link: http://managementdisrupted.com/owen-kerr/


ON THEIR COMPLAINT INSTRUCTIONS IT SAYS ALL COMPLAINTS TO BE SENT TO OWEN KERR BUT WHEN I REQUESTED HIS CONTACT DETAILS I RECEIVED THIS REPLY:


Unfortunately, Owen is out of the office long-term at the moment and is not available - this admin@pepperstone.com inbox is our highest internal resolution point as it stands.


At this stage if you wanted to follow up this matter further, the next best step would be to follow our external dispute resolution in accordance with the PDS, section 24: https://pepperstone.com/legal/PepperstonePDS.pdf


Thank you.


Pepperstone Admin
 

Beautyqueen

Recruit
Messages
6
I am afraid they are scammers. I lost a lot of money to these individuals. Do they care? No and they even had the cheek to refuse me a chargeback. They bullied my bank into refusing a chargeback.
 

4evermaat

2nd Lieutenant
Messages
2,133
@shortcake,

I commend you on your good notes. While video capture would be better, you have established a pretty good timeline of events and took some good notes. Pepperstone has done some questionable things in the past, like closing trades over a weekend break while the market was closed. They were never able to explain how they were able to do that.

a couple of things you can do now is:

1) invite pepperstone to this thread and ask them to discuss openly why they felt justified in taking the action they have taken (copy the url of this thread and send it to their support/compliance email address, and social media accounts like twitter)

2) leave an FPA review about pepperstone to share your experience with others: http://www.forexpeacearmy.com/forex-reviews/7523/pepperstone.com

3) Not sure if gold/silver are considered forex pairs according to FPA rules. If they are, then you can file a trader's court case in about a week or so if Pepperstone does not resolve the case here. @AsstModerator can advise.

4) Have you contacted Australia's FOS. If you can establish clear fraud, you have a good chance of reaching a favorable settlement.

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I am afraid they are scammers. I lost a lot of money to these individuals. Do they care? No and they even had the cheek to refuse me a chargeback. They bullied my bank into refusing a chargeback.

@Beautyqueen The originating company cannot refuse a chargeback; they can challenge it. Sometimes the issuing bank may want to avoid paying out even if fraud was proven.

Please open a separate scam alerts thread and present your evidence there. If you already have, please link to it.
 

4evermaat

2nd Lieutenant
Messages
2,133
@shortcake, I do have some questions:

1) what was the timeframe of the charts? Also, you didn't label them. But they appear to be 4 charts of the same time, but they all look a bit different. Are they from 4 different terminals? I need more context as to how the screenshots were taken or how each of them of the same event is different.

2) the final screenshot where the trades are closed. It's unclear what that is supposed to show. Can you take a new screenshot that shows ("scrollshot" if applicable or just take several screenshots of the relevant section and "stitch" them next to each other).

Or maybe a short video capture of the entire trade open/close sequence would be easier. You can always save individual frames later if needed.
 
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