October 2017 Update: 2 of the 4 cases against LiteForex have been fully resolved. In the other 2 cases, the FPA has seen evidence that the funds have been returned to the accounts of the clients.
All other terms of the FPA Scam Finding have been met.
The FPA now considers all issues regarding the previous Scam Finding to be resolved.
FPA Scam Finding
We the members of the Scam Investigations Committee of the Forex Peace Army have deliberated on all the evidence available to us and have reached a conclusion. It is our opinion that...
There has been a string of FPA Traders Court cases against LiteForex. Out of 5 cases, all initially resulted in Guilty votes. One was resolved when LiteForex and the client reached an agreement. The details of the cases are...
Case #1 FPA member Ala Sadeq made several deposits. After losing the first 2, he reports that after making a profit the 3rd time, he was able to withdraw his initial deposit, but was then accused of bonus fraud when he tried to pull out any profits. ElizavetaLiteForex repeated the accusation in Ala Sadeq's thread in Scam Alerts. Ala Sadeq publicly gave permission for LiteForex to publish trading records to support their accusation. Several FPA members requested this information be posted. It never was.
Case #2 FPA member Rajivxxx was trading profitably. Then LiteForex removed enough profits to leave his account negative under rule 6.8 in Lite Forex's terms. At the time, that rule limited traders to a maximum profit of 10% on gap openings or news trades. All profits above 10% of the account balance as well as any profits of less than 10% were subject to confiscation. ElizavetaLiteForex joined the thread in the Scam Alerts folder and said the company had applied this rule correctly.
The FPA considers the rule to be strong evidence that LiteForex doesn't hedge itself quickly around news driven market moves and that the company doesn't bother to hedge itself over weekends. The FPA considers the rule itself to be a license to indiscriminately steal money from traders.
Case #3 FPA member Jareer had some trades that LiteForex claimed violated their 2 minute rule and other trades that violated rule 6.8 by making too much profit. The FPA takes no stand on trades canceled under terms limiting trades of 2 minutes or less as long as this applies equally to profitable and losing trades and the rule is well documented. The FPA does take a stand that limiting profits from legal trades is unacceptable.
The vote came in as Guilty. The outcome was changed to Resolved when Jareer accepted a deal from Lite Forex for 50% of the disputed money.
Case #4 FPA member M&Z made profits and was then accused of getting illegal profit by violating bonus rules. Alexander.Liteforex responded in his thread and made accusations of 2 accounts trading from the same IP. M&Z denied this. Then Alexander presented a 2nd IP that M&Z and the other account both used to place trades. The second IP belonged to LiteForex.
Case #5 FPA Member Grubson was told that his account was under investigation by LiteForex. The account has been blocked since May 17th with no explanation. Grubson reports that he did not accept a bonus, so that should be the issue. The FPA contacted LiteForex about this issue multiple times and was never given a clear answer about what the problem was or when the investigation would be completed.
In the middle of the voting, Alexander.Liteforex posted an accusation that 2 related accounts were working together to abuse the bonus system. Neither account was the one that Grubson was using.
The FPA sees 3 issues here.
The first issue is Rule 6.8. One quote regarding the original version of Rules 6.8 stands out...
The very idea that any broker should have a right to arbitrarily cap profit% on trades is blatant evidence of fraud.
Rule 6.8 has been revised, but still allows for confiscation of profits at LiteForex's discretion.
The second issue is that accusations need to have proof. A trader accused of bonus hunting should be able to have all the facts laid out. Considering the minimum lot size needed to be traded, the FPA doubts that 2 accounts would be used to try to grab a small bonus. If there was evidence of 4 accounts trying to move all bonuses to one account, that would be a different situation. The FPA considers accusing a trader of cheating from an IP address inside of LiteForex's headquarters to be laughable.
If proof cannot be provided, then profits should be immediately made available to traders for withdrawal.
The third issue is no broker should be able to delay an investigation for months. Analysis of suspicious trades and any suspicious paperwork should be done within a reasonable time frame. Under all but the most unusual circumstances, the FPA considers 30 days to be more than enough time to investigate any problem once it is detected. Indefinite delays and vague answers for months is not acceptable. This has the appearance of an attempt to get a trader to give up or to settle for a portion of the profits owed instead of the full amount that was earned by successful trading.
To show up at the last moment and provide evidence unrelated to the account being discussed makes us believe that LiteForex needs to investigate its own internal procedures.
Failure to return money legitimately owed to traders is the FPA's first definition of scam. In 4 of the 5 cases above, LiteForex has failed to show what the FPA considers to be a valid reason to confiscate any part of profits or to block access to money in an account.
Under these circumstances, the FPA has no choice but to declare that LiteForex.com is a scam broker. This ruling applies also to any other related websites. We offer Lite Forex the opportunity to have this scam finding lifted by meeting these requirements...
1. Return all disputed client money from the 4 Guilty cases immediately. Add a 0.5% monthly compound interest payment for each full month starting from the date the problem first began as compensation for taking the money of traders.
2. Revise rule 6.8 so that evidence of partial or no fills with liquidity providers for news trades must be provided. We recommend that LiteForex either fully permit news trading or ban it. Further, LiteForex must end any confiscation of profits over weekends. If LiteForex.com chooses to not hedge itself over weekends, then all gains or losses for weekend gaps are the responsibility of the company.
3. If a trader is accused of bonus hunting, LiteForex needs to provide full evidence of all involved trades and IP addresses within 10 working days of the trader's request for such evidence. The FPA recommends waiting until at least 4 accounts are involved before Lite Forex considers such accusations as being backed by enough evidence.
4. If a trader is under investigation for anything, LiteForex needs to provide all facts that they legally can share at the trader's request. Under all but the most exceptional circumstances, any such investigation needs to be completed and all evidence provided to the trader by Lite Forex within 30 days of the beginning of the investigation.
LiteForex.com is hereby blacklisted by the Forex Peace Army. We urge traders not to do business with this company or with any company associated with it. For those who already have accounts there, we recommend that you attempt to withdrawal all funds as quickly as possible.
Discussion Thread for this Scam Finding
FPA Traders Court Case 1
Original Complaint Thread for Case 1
FPA Traders Court Case 2
Original Complaint Thread for Case 2
FPA Traders Court Case 3 (Resolved)
Original Complaint Thread for Case 3
FPA Traders Court Case 4
Original Complaint Thread for Case 4
FPA Traders Court Case 5
Original Complaint Thread for Case 5
FPA Review Page for LiteForex.com