Squared Financial Services Limited

ABV

Private, 1st Class
Messages
59
Squared Financial Services Limited and spread 2044 points for the Guinness Book of Records

I am a customer of a broker named Squared Financial Service Limited Squared Financial Provide Next Generation Trading Software since May 2012. June 24 at 21:03 GMT suddenly, without any need of the market, without having any reason, the broker has increased the difference between the buy and sell price (spread) on the currency pair EUR-JPY with the usual 8-15 points to more than 2,000 points and set a rate of purchase (ask) 129.475, while the rate of purchase (bid) 127.431.
This action is not a market, and is illegal. First of all, it provoked a general opening of the pending orders, which were located at different levels and then the total closure of all orders and great loss.

In the attached file named “file_1”, you can see an increase of the spread to nearly 800 points. I was able to catch this picture.
In the attached file named “file_2” you can see the reverse reduction spread in 3 minutes to 100 points. You can also see that $36,501.07 dollars (that were in my account before 21:03) turned into little more than $6,000.
In the attached file named “file_3” you can see the exact value of the price ask = 129,475 (circled in blue oval) and the price bid = 127,431 (circled in red oval). The difference between them is 2044 points. I think this is the absolute maximum of spread, which is worthy of the Guinness Book of Records. Even in 1998 or in 2008, the market of foreign exchange has not seen these values of spread, so this is not a market event. Also, in this picture you can see that the market was calm until 21:03, and remained calm after 21:03.
If these events were natural and market, the increase of the spread we have seen in the quotations of other currencies and in the quotations of other brokers.
I believe that this action is illegal and unlawful, for the following reasons.
1. On a similar pair USD-JPY at this same moment, nothing similar is recorded. Anyone can verify this yourself. If necessary, I can provide print-screen images.
2. Other brokers anything like that could prove possible or similar market situation is not fixed. Anyone can verify this yourself. If necessary, I can provide print-screen images.
In the attached file named “file_6” you can see the achieved value of the price ask 129,475 (indicated by the blue line) and the price bid 127,431 (indicated by the red line).
It is easy to see that the difference between the lines is 2044 points and more than the average spread in the 8-15 points, but even greater than the difference between the daily high and daily low on this day in 1928 points.
This spread expansion has resulted to a global stop-out, not counting the mini heart attack which I got when I saw it all in front of the terminal. As a result, my trading strategy was broken.
I immediately sent an indignant email and even received a reply: “Hi, We will get all deals from 21.01 to 21.03 cancelled. This will be reflected in your account tomorrow morning and apologies for this inconvenience”. But not in the morning or afternoon nothing happened.

I sent three complaints by email, but received no response. No one response.
I must admit that yesterday, June 26 at 15:10 GMT, my account balance was credited in the amount of $14,432.00 with commentary “Refund re EURJPY deals 2406”, i.e company admitted their own guilt. But if the company admits guilt, then the company should fully recover my account balance, because at this moment it is impossible to restore my strategy and my plans.
And still no responce on email.

I believe these actions of Squared Financial Services Limited are unlawful and unreasonable.
I ask you to look into this situation. I think that Squared Financial Services Limited has to refund the amount of $29,775.74 to my account as compensation for pecuniary damage and also take steps to prevent similar situations in the future.
 

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Pharaoh

Colonel
Messages
19,919
The spread in the first pic is 80 pips. That's very wide.

What's wider are your SL numbers. If you had those closer, you would likely have suffered far less damage.

Was there a news event of some sort at that time?
 

ABV

Private, 1st Class
Messages
59
The spread in the first pic is 80 pips. That's very wide.

What's wider are your SL numbers. If you had those closer, you would likely have suffered far less damage.

Was there a news event of some sort at that time?
80 pips, if only 80 pips...

It was just the beginning.

Finally spread has expanded to 204.4 pips (2044 point if 5-digit), look ask and bid at "file_3": 129,475 and 127,431.

I still have no news.
 

Head of Legal&Compliance

SquaredFinancial.com Representative
Messages
21
Legal & compliance dept.- response

Dear “Recruit”,

I am head of legal & compliance at Squared Financial Services (SF), and I would like to take this opportunity to respond to your post.

1) Cause of the momentary wide spread

In reference to your statement “the broker has increased the difference between the buy and sell price (spread) on the currency pair EUR-JPY”;

This is not true.

SF does not arbitrarily modify the spread on any currency pairs. SF provides its clients with access to several top tier banks, acting as liquidity providers over our platform, and passes on the top of the book (best bid & best offer) to our clients. For our clients who wish to see an “all in price” (ie; commissions built into the price), we add about 1/10th of a pip to about 1 pip (depending on the currency pair) to the spread which we receive from our pool of liquidity providers.

On June 24th, 2013, at 21:03, all but one of our six liquidity providers pulled their prices (ie did not provide quotes to our system) for several seconds. The one remaining liquidity provider widened its spread well over a big figure (which is similar to pulling prices from the feed).

SF does not control or manipulate market prices either favourably or unfavourably for any party. You are confusing a relatively common FX market phenomena (momentary pull of quotes) with your unfounded idea of market manipulation by SF.

2) Legal situation

In reference to your statement “This action is not a market, and is illegal”;
This is not true.
Your two explanations as to why you “believe this is illegal” have no legal base at all and I encourage you to attempt to find any legislation that could support your accusation.
There is nothing illegal about what happened. What happened is disorderly, out of our control, inconvenient for our clients, but neither malicious, nor ill-intentioned, and definitely not illegal.

Furthermore, SF neither had any control over what happened, nor did SF profit from your this event in any way.


3) Communication & Response

In reference to your statement “I sent three complaints by email, but received no response. No one response”;

Again, this is not true.

My colleagues on the front office promptly had the deals cancelled due to the off market fills and communicated with to you within several hours of the event.

Similarly, on June 26th, I had completed a preliminary investigation of the incident and I sent you an email informing you that your account is reimbursed the undisputed amount. I have not received any response from you. I also attempted to call you on two separate occasions, without avail.


4) Admission of guilt

In reference to your statement “I must admit that yesterday, June 26 at 15:10 GMT, my account balance was credited in the amount of $14,432.00 with commentary “Refund re EURJPY deals 2406”, i.e company admitted their own guilt”;
This is entirely erroneous. No words or actions taken on behalf of SF have been even remotely conceivable as an admission of guilt.

SF ensured that the off market execution was cancelled and that the corresponding sum was credited to your account. The reimbursement to your account is in no way any admission of guilt. “Guilt” necessarily implies malicious intent. The fact that SF reimbursed your account for an off market fill is simply the natural consequence of having the execution cancelled by the bank acting as the liquidity provider.

On the contrary to guilt, it should seem evident to you that SF acted in a fair and reasonable manner by crediting your account for the loss promptly after having obtained that cancellation of the off market trade.

The only admission of guilt I can see in any of all of this is your own admission insofar that you claim that we have not responded to you, and yet you admitted that we reimbursed your account (“I must admit that yesterday, June 26 at 15:10 GMT, my account balance was credited”) and you also cited a response from our staff. Did you simply forget that I sent you a relatively detailed letter explaining what had happened, the investigation that we undertook and my instructions to our back office to reimburse your account?


You are welcome to contact me when you please. In the meantime, it might be wise of you to avoid any potentially defamatory statements.

Sincerely,
Head of Legal & Compliance
Squared Financial Services LTD
 

Pharaoh

Colonel
Messages
19,919
I am happy to see that the issue has been partly resolved.

Can the Squared Financial rep please explain the difference between the deals where $14k was reimbursed due to off market quotes and the other $30k of losses that are reported?
 

ABV

Private, 1st Class
Messages
59
Tell me, please, dear Head of Legal & Compliance Squared Financial Services LTD

Is there at least one true word in my post written above?
 
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Head of Legal&Compliance

SquaredFinancial.com Representative
Messages
21
I am happy to see that the issue has been partly resolved.

Can the Squared Financial rep please explain the difference between the deals where $14k was reimbursed due to off market quotes and the other $30k of losses that are reported?

Pharaoh,

As you certainly understand, we are bound by a professional secrecy obligation regarding our clients' information. I will depend upon information publicly disclosed by our client as a waiver of our secrecy obligation (hence my response yesterday), but as the client has not published his accounts, I can not go into any meaningful discussion about them without compromising my obligation to secrecy.

What I can say, however, in general terms, is that our CFO has identified the source of our client's confusion. In sum, the client has confused "closed balance" and "net equity value".

Regards,
Head of Legal & Compliance
 

ABV

Private, 1st Class
Messages
59
I am head of legal & compliance at Squared Financial Services (SF), and I would like to take this opportunity to respond to your post.

1) Cause of the momentary wide spread

In reference to your statement “the broker has increased the difference between the buy and sell price (spread) on the currency pair EUR-JPY”;

This is not true.

Yes, you are right, if you are using the term "spread" as it is used in wikipedia Bid?offer spread - Wikipedia, the free encyclopedia I'm quoting:
The bid–offer spread (also known as bid–ask or buy–sell spread (in the case of a market maker), and their equivalents using slashes in place of the dashes) for securities (such as stocks, futures contracts, options, or currency pairs) is the difference between the prices quoted (either by a single market maker or in a limit order book) for an immediate sale (offer) and an immediate purchase (bid).
In some ways, it's 2 different definitions as the number of words, and by the location of words, is not it?

What is the difference did you find more to tell me "This is not true"?



On June 24th, 2013, at 21:03, all but one of our six liquidity providers pulled their prices (ie did not provide quotes to our system) for several seconds. The one remaining liquidity provider widened its spread well over a big figure (which is similar to pulling prices from the feed).

Your claim is proofless.
There is no liquidity provider who widened its spread over a big figure. Otherwise, you would call his name and provided evidences.
At th same time at USD-JPY, there was no such problems. No other pair, no other brokers, nothing.

On June 24th, 2013, at 21:03, all but one of our six liquidity providers pulled their prices (ie did not provide quotes to our system) for several seconds. The one remaining liquidity provider widened its spread well over a big figure (which is similar to pulling prices from the feed).

Do you insist?
OK, now problem. Let's imagine for a minute, that there is such provider. But only for a minute.
OK, He gives you a figure. You are adding one figure more (we need to earn something too, right?) and the client receives more than 2 figures of spread. Be my guest dear client. Eat and do not choke.
Tell me, please, how did you do that?

Tell me, please, who exactly did provide you such spread?
Motherland must know the heroes.


2) Legal situation

In reference to your statement “This action is not a market, and is illegal”;
This is not true.

Yes, you are right again. I like this guy.
It's absolutely market and legal actions.
Each monkey in the zoo will laugh when I tell her that 204.4 pips is not a market and illegal behavior.
Because each monkey knows that spread 204.4 pips is the most common occurrence, ordinary event. In any zoo it happens day by day.

Tell me, please, if you are calling it as "market and legal", - why did you return me almost half of money?


3) Communication & Response

In reference to your statement “I sent three complaints by email, but received no response. No one response”;

Again, this is not true.

My colleagues on the front office promptly had the deals cancelled due to the off market fills and communicated with to you within several hours of the event.

You are mixing/confusing red and sweet.
I'm talking about "I sent three complaints by email, but received no response. No one response".
You are talking about the events that happened much earlier.
Show me, please, where did I tell you that one of your staff didn't send me any letter?
Yes, he did it.
I'm quoting:
Hi,

We will get all deals from 21.01 to 21.03 cancelled. This will be
reflected in your account tomorrow morning and apologies for this
inconvenience.

Regards,

David

Tell me, please, where can I see the restored positions at the next morning?

So you are not telling the truth.

3) Communication & Response
Similarly, on June 26th, I had completed a preliminary investigation of the incident and I sent you an email informing you that your account is reimbursed the undisputed amount. I have not received any response from you. I also attempted to call you on two separate occasions, without avail.

Wow, on June 26th!!!

Tell me, please, dear Head of Legal & Compliance,
Did you sleep well that night? Night from June 25 till June 26?
What is about night before? Night from June 24 till June 25?

Did all of your other directors sleep well that night too?
What is about night before? I'm happy for you and for them.

Do you want to know how I slept?
I almost did not sleep.

Tell me, please, dear Head of Legal & Compliance,
What did you do that I slept as well as you and your other directors?

Nothing!

4) Admission of guilt

In reference to your statement “I must admit that yesterday, June 26 at 15:10 GMT, my account balance was credited in the amount of $14,432.00 with commentary “Refund re EURJPY deals 2406”, i.e company admitted their own guilt”;
This is entirely erroneous. No words or actions taken on behalf of SF have been even remotely conceivable as an admission of guilt.

Wow, tell me, please, again, I still have not heard, why did you return me almost half of money?
Or it was not you? Who else have an access to your server to send me such gifts?
It's not a gift?
But what is it?
Money for vacation to Acapulco? Money for emergency ambulance?

SF ensured that the off market execution was cancelled and that the corresponding sum was credited to your account. The reimbursement to your account is in no way any admission of guilt. “Guilt” necessarily implies malicious intent. The fact that SF reimbursed your account for an off market fill is simply the natural consequence of having the execution cancelled by the bank acting as the liquidity provider.

If you are cancelling my position, be kind, to restore balance of my account and reimburse lost of profits.

Did you simply forget that I sent you a relatively detailed letter explaining what had happened, the investigation that we undertook and my instructions to our back office to reimburse your account?

May be did YOU simply forget that you didn't send me any answer?
You can attach your letter here or send me once again.
I was checking my email box EVERY Minute - and it is easy to understand- WHY!!!
Because I LOST almost $30K within 30 seconds - and it was NOT my fault and I wanted to know what is going on!!


You are welcome to contact me when you please.

You????

You are not answering 3 my complaints?

Tell me, please, when can I get an answer?
 
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