Correct me if I misread the complaint, but Alpari wasn't actually forced to pay that one client the $220,000 he made from the Options trades, right? Even though there was some confusion about which version of the user agreement was actually signed, Alpari didn't do anything wrong by cancelling those trades. They just failed to report it properly/quickly, failed to keep accurate records of exactly which version of the user agreements were signed, failed to properly record one phone call, and all this implies that the supervisors failed to properly supervise the operations. And of course, they failed to properly test the system (they depended on the liquidity provider instead) which allowed those trades to happen in the first place.
A $200,000 fine might seem like a tiny slap on the wrist but it seems appropriate for the 'crime', no? They weren't doing anything to intentionally rip off clients, there were just a pile of administrative errors and technical errors.
Again I might have misread the complaint so someone can correct me if I'm wrong.
This is one of the reasons why I would never open a brokerage firm. You might be the most honest broker in the world and never do anything to hurt your clients but if you don't dot every 'i' and cross every 't' perfectly, WHAM! These rules exist to protect us (the clients), I just feel bad for the administrators at these brokerages too.
Scott Wang
Forex Verified