Hopefully, FXCM has seen the light.
There is some forum chatter that clients — at least in France — are being told that negative account balances are being cleared. Although others report to us that accounts are still showing negative.
Before the SNB move, FXCM repeatedly advertised that clients could never lose more than they had in their accounts.
After they lost $225 million on the SNB decision, they flirted with declaring force majure. I’m not a lawyer but, it sounded like a very flimsy argument to me and it would certainly destroy their credibility and business going forward.
This was from the latest FXCM statement:
The SNB announcement, extreme price movements and the resulting lack of liquidity were exceptional and unprecedented events causing many market participants to incur trading losses. These events were unforeseen and beyond the control of FXCM, constituting force majeure events.
Force majure is an unforeseeable accident. Seeing as many brokers were able to foresee it, hedge and protect themselves; it doesn’t sound like a viable argument. They might even open themselves up to counter-suits based on the advertisements.
We continue to urge FXCM and other brokers to move quickly to make good on their promises to clients and advertisements and clear negative balances as soon as possible.
If anyone has more info, please post it in the comments.
