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Hi all.
First post here, apologies if in the wrong section. Looking for some collective wisdom about an issue with a broker. I had sent the following email to quite a few solicitors and while most didn't respond, the others don't seem to think its a viable proposition to proceed (too expensive to proceed for such a minor amount).
I opened an "execution-only" account with the broker in Jan. 2010, after moving to the UK in Dec. 2009. I had a total savings of £12,000 and wanted to "invest". I had got in touch with the broker through their web site and probably wasn't the right customer for CFDs.
I realised that CFD trading isn't "investing", and I opened some hedged positions and let them be and kept monitoring my account. In addition to the mis-sold issue the following has also happened.
In January 2018, the market moved significantly against me, and 17 of the 20 open positions were closed - due to a margin call and for the first time I couldn't deposit the additional amount. I had previously tried to setup an alert if margin fell below a certain threshold - but the broker doesn't have that possibility. Within an hour I contacted the broker and they said they couldn't reopen the positions. Then I pointed out that it was unnecessary to close so many positions as they were hedged and closing them just realized losses.
The COBS requirement (22.5.13 (2)) to close positions below 50% of margin requirements could be met by just closing 1 in profit position, without a loss at all. The account could have been brought to 68% margin by closing one more position causing a loss of £4,000. To meet the 100% margin requirement the broker could close an additional 2 positions for an accumulated loss of £9,005. However, the automated methodology used (First In First Out) caused hedged positions (an additional 14) to close adding an additional £9,569 in loss. This brought the total loss to £18,575. The broker has conceded that this information isn't available on the site and the additional loss was incurred specifically due to the way they closed the positions.
I wonder if COBS requirements (2.1.1R and 11.2A.2R) were met. Could there be a claim for the additional loss(es). I had never traded before and wasn't aware about the complex nature of the product.
I believe I wouldn't qualify to open an account post 2019 requirements. I was wondering:
1. If it would make sense to proceed for the smaller loss (£9,569) in small claims? How would be the best way to proceed?
2. If anyone would proceed for the total loss (£18,575) on a "No Win, No Fee" basis.
3. Any other suggestions?
Thanks again in advance
First post here, apologies if in the wrong section. Looking for some collective wisdom about an issue with a broker. I had sent the following email to quite a few solicitors and while most didn't respond, the others don't seem to think its a viable proposition to proceed (too expensive to proceed for such a minor amount).
I opened an "execution-only" account with the broker in Jan. 2010, after moving to the UK in Dec. 2009. I had a total savings of £12,000 and wanted to "invest". I had got in touch with the broker through their web site and probably wasn't the right customer for CFDs.
I realised that CFD trading isn't "investing", and I opened some hedged positions and let them be and kept monitoring my account. In addition to the mis-sold issue the following has also happened.
In January 2018, the market moved significantly against me, and 17 of the 20 open positions were closed - due to a margin call and for the first time I couldn't deposit the additional amount. I had previously tried to setup an alert if margin fell below a certain threshold - but the broker doesn't have that possibility. Within an hour I contacted the broker and they said they couldn't reopen the positions. Then I pointed out that it was unnecessary to close so many positions as they were hedged and closing them just realized losses.
The COBS requirement (22.5.13 (2)) to close positions below 50% of margin requirements could be met by just closing 1 in profit position, without a loss at all. The account could have been brought to 68% margin by closing one more position causing a loss of £4,000. To meet the 100% margin requirement the broker could close an additional 2 positions for an accumulated loss of £9,005. However, the automated methodology used (First In First Out) caused hedged positions (an additional 14) to close adding an additional £9,569 in loss. This brought the total loss to £18,575. The broker has conceded that this information isn't available on the site and the additional loss was incurred specifically due to the way they closed the positions.
I wonder if COBS requirements (2.1.1R and 11.2A.2R) were met. Could there be a claim for the additional loss(es). I had never traded before and wasn't aware about the complex nature of the product.
I believe I wouldn't qualify to open an account post 2019 requirements. I was wondering:
1. If it would make sense to proceed for the smaller loss (£9,569) in small claims? How would be the best way to proceed?
2. If anyone would proceed for the total loss (£18,575) on a "No Win, No Fee" basis.
3. Any other suggestions?
Thanks again in advance
