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Discussion in 'Forex Brokers' started by Administrator, Dec 15, 2011.

  1. Administrator

    Administrator Just Administrator :-)

    Sep 24, 2007
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  2. bigbird

    bigbird Private

    Sep 18, 2014
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    Hello people.

    This is a first post for me on this forum, or indeed any FX forum, but due to the treatment I've received at the hands of the broker, its IB and the connected money manager, I really would like to understand what is right or wrong practice in the FX world.

    Here is what has happened:

    After an initial conversation with a money manager regarding a handsome looking trading strategy, I asked the MM if I could speak with a representative of Sterling Gent Trading (SGT), the broker - apparently the said strategy was only available through SGT and as they are based in the rather dubious waters of the BVI, I thought it prudent to do some due diligence.

    Anyway I was quickly introduced, by the MM, to the 'representative' there, at SGT. A recorded conversation exists of the initial introduction between me and the 'rep', who clearly asserts that he is an employee of SGT, if not one of its founding partners. This later transpires to be a complete lie.

    On the basis of the exceptional looking trading strategy (verified on myfxbook), the conversation with the SGT 'rep' and also a phone call I made to the BVI regulators regarding SGT (indeed they are a BVI registered broker with a surprisingly unblemished record) I deposited approximately £30,000 with Sterling Gent Trading to access the trading strategy...

    Big mistake! and one that I will never, ever, repeat again. The 'practically no risk' arbitrage style strategy that was described by the MM, as immediately available, took two months to start and within one week or so it was on its knees with losses well outside of the advertised parameters. I immediately applied to SGT for a full withdrawal of the remainding balance of my funds. I received an email back from SGT saying the withdrawal would be processed the next day.

    One week passed and my funds still had not been returned. I contacted the 'rep' who I'd been initially been introduced to as the right-hand-man of the owner of SGT. He told me that my funds had been placed in a special segregated account (one that I had requested at the time of account opening three months previously and that only magically appeared at the time of my withdrawal request) and it would take some time to process the withdrawal. I waited. After two weeks I started skyping this rep daily -always with the same response that nothing untoward was happening and to be patient. After three weeks, in almost desperation, I contacted SGT by the phone number listed on their website. I was quickly told that the 'rep' I had been dealing with was not actually an employee of SGT but just an IB. You might ask why I didn't contact SGT again after my original withdrawal request, either directly by their company email or phone number - this is because I clearly thought I was already dealing with the day-to-day boss of SGT!

    This aside my original withdrawal request emailed directly to SGT was not addressed directly by SGT, themselves. It transpired that the owner of SGT had consulted with the IB, at the time of my withdrawal request, and the IB had responded to the owner that I was completely relaxed regarding the length of time it would take to receive my funds back! The owner of SGT accepted this and SGT did not get back in touch with me regarding the processing of my withdrawal - leaving it up to the IB to sort out. The IB's way of sorting it out was to literally spin me a line every day for three weeks. Question: are IB's allowed to process withdrawals requests made directly with the actual broker? In my limited experience I would think not. Please correct me if I'm wrong.

    To continue. So after three weeks of the IB stalling my withdrawal request, SGT realizes that the IB is not handling my withdrawal, as per my wishes, and they take over. The funds are supposedly sent the 'next day' but a digit on the swift code details is entered incorrectly by SGT and my funds are diverted/ held somewhere else for another week...

    I finally receive the funds into my bank account after about ONE MONTH. Great, I thought...my daily persistence has paid off. The balance of the funds however looks a little on the short side so I asked SGT to provide a complete statement of my account (none had been provided in the previous three months). One appears the next day and I notice that not only has the base currency of the account been changed from GBP to USD and then back to GBP again (upon my withdrawal request) but that astronomical costs have been incurred as commission in the exchange. Not only this, the funds had actually been sent to another broker...where the exchange took place. This was impressively surprising information to receive as I had been expressly told by the MM and the 'rep'/IB that my funds could be kept in GBP base currency and would not need to be converted to USD even though the trading system used USD. This was mentioned in the initial introduction and my recording proves it.

    I immediately contacted the owner of SGT, directly now, questioning this. His response over the last three weeks has been that the funds were transferred, by the IB/MM, to another broker to access the desired trading system and that the trading system only worked in USD so the other broker converted the GBP funds and deducted the cost from my account. All this happened completely behind my back and without any notification that the funds would be withdrawn from SGT and sent to the other broker. No notification was sent to me regarding the conversion of the funds from GBP to USD and I was never made aware that this was happening, even after being expressly told by the 'rep'/IB that my funds would NOT be converted. SGT has clearly stated several times now that it is not their responsibility that my funds, that I deposited into their safe-keeping, were sent to another broker, exchanged at a horrendous rate and then returned. They cite that the LPOA of the MM allows the MM to make a withdrawal and really it seems to do whatever he likes. No such authorisation exists within the LPOA that I gave to the MM. The only thing he is allowed to do is to trade the funds in the account and certainly to not make any withdrawals (to other brokers). SGT also told me that I was kept informed of the GBPUSD conversion throughout the whole process by the IB (they 'have an email from the IB to prove it'!). No notification was sent to me, from the IB or MM, that a withdrawal/ funds conversion was to to take place and no authorisation, from myself was given. The only reference to this conversion was listed in my original conversation (recorded) with the IB and for me it was clear my funds would not be converted.

    The questions that arise, in my FX inexperienced mind, at this point are:

    1/ Shouldn't a broker (IB/MM involvement or not) advise the client, in advance/ writing, if funds are to be transferred to another broker?

    2/ Shouldn't a broker (IB/MM involvement or not) advise the client, in advance/ writing, if an accounts funds are to have their base currency changed?

    3/ Shouldn't a broker (IB/MM involvement or not) advise the client, in advance/ writing, what the cost of conversion of the funds will be?

    4/ Shouldn't a broker (IB/MM involvement or not) receive written notification first, from the client, authorising them to do the above actions before proceeding?

    5/ If the broker ignores the above protocol, assuming its correct, shouldn't they be liable for the costs of the unauthorised GBPUSD base currency exchange?

    6/ Is it normal practice for a broker to allow an IB/MM to send funds to another broker, convert the base currencies of client's accounts?

    7/ Is it normal practice for a broker to allow an IB to delay the processing of a withdrawal request without contacting the client directly- indeed is an IB allowed to process a withdrawal request?

    Sterling Gent Trading firmly maintains that they are not responsible for any of the above actions/ losses. I would like to clarify, from more experienced traders, if this position is indeed correct. As things stand, at the moment, I feel the broker is indeed responsible and I have contacted SGT numerous times to try and reconcile this. They initially responded very professionally but have now apparently placed me in their spam folder, with no further response being forthcoming.

    Any advice / response is appreciated!
  3. Leticia

    Leticia Private, 1st Class

    Oct 20, 2010
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    Hi bigbird,

    I think your case deserves to be in the Traders Court (if not already). Do a research here on how to go about putting your case out so it will get better attention and help. Top of this page has tabs. The 4th from the left says, TRADERS COURT. Hover over that tab ..a screen pops out...choose, TRADERS COURT > File a Case. Just copy/paste what you have written here. Best wishes!
: sterlinggent

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