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Brokers chasing you for negative account balance

  • #341
  • Jan 23, 2015 6:23am Jan 23, 2015 6:23am
Hi,
There is one thing to take out from this CHF crisis. In my view - and correct me if i'm wrong- brokers who return your negative balance to 0 are most likely a b-book.
Meaning your trades/positions never really was exposed to the market. You traded inside the Market Making brokers virtual environment. Therefore your minus was never real. From MM perspective they cant reclaim your minus due to the fact that in case of legal actions they would need to expose their real activities to the world.
And to bring you back to 0 balance is just 1 click - no real money costs. So you could happily play your game again, and again making them commissions. And they gain extra good reviews on the way how great they are giving money back.
LMAX beeing REAL MARKET ,don't give a s..t about you, as why would REAL MARKET give any s..t about traders - its a venue to exchange trades not a broker as such.
If that makes sense....i might be wrong tho.
  • #342
  • Jan 23, 2015 6:28am Jan 23, 2015 6:28am
From Wikipedia

The importance of the force majeure clause in a contract, particularly one of any length in time, cannot be overstated as it relieves a party from an obligation under the contract (or suspends that obligation). What is permitted to be a force majeure event or circumstance can be the source of much controversy in the negotiation of a contract and a party should generally resist any attempt by the other party to include something that should, fundamentally, be at the risk of that other party.[4] For example, in a coal-supply agreement, the mining company may seek to have "geological risk" included as a force majeure event; however, the mining company should be doing extensive exploration and analysis of its geological reserves and should not even be negotiating a coal-supply agreement if it cannot take the risk that there may be a geological limit to its coal supply from time to time. The outcome of that negotiation, of course, depends on the relative bargaining power of the parties and there will be cases where force majeure clauses can be used by a party effectively to escape liability for bad performance.
  • #343
  • Jan 23, 2015 6:38am Jan 23, 2015 6:38am
I could still see a court deciding in favour of the customer. Retail clients are seen basically as idiots that need special protection by regulation/consumer laws. Printing in fat latters "negative balance protection" on their website vs. their fineprint - that is at the very minimum misleading advertisement. The NFA would wipe the floor with them.
  • #344
  • Jan 23, 2015 6:43am Jan 23, 2015 6:43am
Quoting goldfinch
{quote} FXCM clearly states in their T&C's the following: {quote} Seems pretty clear and obvious to me, the SNB dropped the floor (they directly and explicitly refer to such an act in their terms) , FXCM enacted their Force Majeure policy as stated in their T&C's and any promise of "negative balance protection" earlier in the terms is now no longer valid and they can take any and all steps necessary to protect their business and other customers. I really can't see any court anywhere in the world agreeing with the retailer that is refusing to pay...
Dunno about this dude...

Force Majeure seems a lot like, a "we will do whatever the fuck we want", clause...but that certainly doesn't supersede the clause that states they will not come after negative balances.

I would be willing to bet if they had to crack open the books, there'd be thousands of precedence set where accounts closed on a negative balance where they never sent out the leg breakers for account recovery.

Given this, I believe that altering trading times, margin requirements and even amending the Terms of Business would be deemed, "reasonable", with prior written notice.

The shit had already hit the fan...

They had no more conceptual idea about this as a possibility than any of those caught in the same position.

IMO, it's pretty clear cut...FXCM is Proper Fucked.
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #345
  • Jan 23, 2015 6:45am Jan 23, 2015 6:45am
Quoting goldfinch
{quote} FXCM clearly states in their T&C's the following: {quote} Seems pretty clear and obvious to me, the SNB dropped the floor (they directly and explicitly refer to such an act in their terms) , FXCM enacted their Force Majeure policy as stated in their T&C's and any promise of "negative balance protection" earlier in the terms is now no longer valid and they can take any and all steps necessary to protect their business and other customers. I really can't see any court anywhere in the world agreeing with the retailer that is refusing to pay...
Whoever is right, they wont get the money from people. How do you think they will get the money back? And if you owed them money, what is your incentive to pay them?
Forex rules
  • #346
  • Jan 23, 2015 6:49am Jan 23, 2015 6:49am
Quoting goldfinch
{quote} FXCM clearly states in their T&C's the following: {quote} Seems pretty clear and obvious to me, the SNB dropped the floor (they directly and explicitly refer to such an act in their terms) , FXCM enacted their Force Majeure policy as stated in their T&C's and any promise of "negative balance protection" earlier in the terms is now no longer valid and they can take any and all steps necessary to protect their business and other customers. I really can't see any court anywhere in the world agreeing with the retailer that is refusing to pay...
Not sure about this, but I believe any lawyer can argue Gross Negligence in FXCM's risk management policy causing massive losses. I don't think FM can be claimed, when everyone in the world knew the SNB had the option to take away their cap whenever they so choose. Ignorance of not being prepared for what could happen is no excuse to claim FM.

IMO, FXCM is desperate to follow through on the bailout agreement and is sticking out its neck on this one. I believe that is why the wording states "requests" clients to pay negative balances and not "required" or "obligated" like the way Saxo has done.
  • #347
  • Jan 23, 2015 6:50am Jan 23, 2015 6:50am
{quote} Let me see, bankruptcy, goods being seized, wages being garnished.[/quote]

Yeah right, you obviosuly dont live in the real world do you. They would WRITE/THREATEN etc, and get nowhere. The cost of lawsuits would outweigh the debt.
Forex rules
  • #348
  • Jan 23, 2015 6:54am Jan 23, 2015 6:54am
Quoting goldfinch
{quote} Read that quote I gave you in an earlier post, it is very clear it specifically refers to the event we saw last week and gives the broker every right to suspend the agreement and any clauses therein, including any promises made. There is no wiggle room in this one. {quote} Let me see, bankruptcy, goods being seized, wages being garnished.
Read the quote and from my days with contract law, having 2 separate clauses that contradict, the ruling will typically go in favor of the consumer.

Other brokers may not be in the same boat, but with the specified clause stating that they will not chase negative balances, they have no legs to stand on.

As far as goods being seized and wages being garnished, this is almost laughable. If they were hosting tennants that didn't pay rent, or were the government, it might come down to garnishee and seized assets, but about the best they could try for is a black mark on your bureau...
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #349
  • Jan 23, 2015 6:54am Jan 23, 2015 6:54am
Anyone with a sizable negative balance should speak to a lawyer anyways rather then to rely on internet-expertise. It doesnt look that clear cut to me due to the advertisements they had on the website.
  • #350
  • Jan 23, 2015 6:55am Jan 23, 2015 6:55am
Quoting goldfinch
{quote} No it isn't, I can't see anything wrong here, you may not like it but it doesn't take away from the fact that the law and the terms and conditions are on the side of the broker in this case.

Anyone please be advice when reading "goldfinch" post, as per his previous posts he clearly states that he has some financial interest in FXCM since he is a shareholder so when reading his post take it with a grain of salt. Some of his posts are misleading.
  • #351
  • Edited 7:13am Jan 23, 2015 6:55am | Edited 7:13am
Quoting shrike
I could still see a court deciding in favour of the customer. Retail clients are seen basically as idiots that need special protection by regulation/consumer laws. Printing in fat latters "negative balance protection" on their website vs. their fineprint - that is at the very minimum misleading advertisement. The NFA would wipe the floor with them.
This. And retail clients are indeed idiots. They don't have a winning strategy most of them but they don't trade on demo, they want real. They deposit money at brokers where they can lose more than their deposit falsely believing they can only lose their deposit. etc.
  • #352
  • Jan 23, 2015 6:57am Jan 23, 2015 6:57am
Quoting Silver777
I believe that is why the wording states "requests" clients to pay negative balances and not "required" or "obligated" like the way Saxo has done.
Great point.

Quoting dsb104
The cost of lawsuits would outweigh the debt.
In order for this to be even viable, they would have to run credit checks on the biggest losers to see who they "MAY" be able to collect from, and try those first. After that, folk with a few grand in the stink would need be written off for the costs definitely outweighing the possible gains.
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #353
  • Edited 7:37am Jan 23, 2015 6:58am | Edited 7:37am
Quoting Magix
{quote} IMO, it's pretty clear cut...FXCM is Proper Fucked.
And this. I already withdrawed my money from them because they don't want to pay the negative balance. (although I don't have a negative balance, this was the only reason I made an account with them). I'm sure many traders will do the same. I can't say I feel sorry for them. In fact I'm happy FXCM will go bankrupt. I will only hope they won't go bankrupt only if they do what they said in all marketing, that you can't lose more than the deposit and that they will credit the balances to 0.
  • #354
  • Jan 23, 2015 7:00am Jan 23, 2015 7:00am
Quoting triger88990
{quote} Anyone please be advice when reading "goldfinch" post, as per his previous posts he clearly states that he has some financial interest in FXCM since he is a shareholder so when reading his post take it with a grain of salt. Some of his posts are misleading.
Anybody reading any of the posts should take each reply with a grain of salt.

Unless you are in this sinking ship with FXCM and your phone rings, there is zero information to conclusively draw from.

Everything in this post is merely an "Idea" or "Opinion".

Once the first legal cases come to close, it will be only then that we will see where the rubber truly meets the road.
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #355
  • Jan 23, 2015 7:05am Jan 23, 2015 7:05am
Quoting goldfinch
They will need a precedent somewhere, well worth spending a few 100k on.
Even at this, as they are not a lending institution such as a bank or credit card, they wouldn't actually be able to just, run down you and your credit history...unless there is some other fine print in their contract stating that they can openly run a credit check on you...

Meaning they will have to blindly Google that shit, and hope they don't have a lot of traders with common names...Smith, Jones.....



After they are finished Gumshoeing...they need a fat enough cat to fry before this still becomes viable.

Given the state of the states and the quality of the actual broker...I got a nickle that says they never catch their man.

If for some reason, a multi-zillionaire is in the ranks of "FXCM Trader", he will have enough capital to effectively mount a suitable counter.

ERGO....FXCM is Proper FUCKED!
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #356
  • Jan 23, 2015 7:21am Jan 23, 2015 7:21am
Quoting str8
{quote} And this. I already withdrawed my money from them because they don't want to pay the negative balance. (although I don't have a negative balance, this was the only reason I made an account with them). I'm sure many traders will do the same. I can't say I feel sorry for them. In fact I'm happy FXCM will go bankrupt.
The impact of these days will resonate for years to come.

Having all eggs in one basket was an idea I gave up on, years ago when my primary broker was closed for close to 24 hours without being able to open/close positions during active trade times.

Spreading to a few brokers was the only way I seemed to be able to find the trades when trades were available.

Again, I have closed all of my major accounts, hold on to a fist full of dogshit accounts for testing but even with these am in no real hurry to just surrender my loot to the anarchy that is currently FOREX.

With my forecast of 1.25 on USDCAD and Parity on EURUSD, we seem to be destined to hit these targets. From there, it's really hard to say what will happen and given the speed of current play, the state of global economics and the possibilities we've seen with the unpegging by the Swissy, I am of the mind that there are better games in town.

Fuckem.

I will sit on my hands until I am damn good and ready to test the waters again.
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #357
  • Jan 23, 2015 7:34am Jan 23, 2015 7:34am
[quote=Magix;8018669coed. ote} Even at this, as they are not a lending institution such as a bank or credit card, they wouldn't actually be able to just, run down you and your credit history...unless there is some other fine print in their contract stating that they can openly run a credit check on you... Meaning they will have to blindly Google that shit, and hope they don't have a lot of traders with common names...Smith, Jones..... After they are finished Gumshoeing...they need a fat enough cat to fry before this still becomes viable. Given the state of the...[/quote]

Game.....set......match......or checkmate if you will.

Excellent points, I believe that FXCM took the bailout in desperation to meet regulator liquidity requirements and now are making ANOTHER desperate attempt to follow the terms of the bailout and squeeze clients for losses.

Hence, properly f*cked....
  • #358
  • Jan 23, 2015 8:22am Jan 23, 2015 8:22am
Quoting Magix
{quote} Even at this, as they are not a lending institution such as a bank or credit card, they wouldn't actually be able to just, run down you and your credit history...unless there is some other fine print in their contract stating that they can openly run a credit check on you... Meaning they will have to blindly Google that shit, and hope they don't have a lot of traders with common names...Smith, Jones..... After they are finished Gumshoeing...they need a fat enough cat to fry before this still becomes viable. Given the state of the...
I don't know. They can sell their claims to some 'russian' incasso service for 20 cent the dollar. Wouldn't get them all the money they're owed, but the people with negative account won't have a grand old time either.
I for one would apply to take over their german claims, would be a nice hobby to persue while trading the daily charts...
Fail better.
  • #359
  • Jan 23, 2015 8:40am Jan 23, 2015 8:40am
Quoting LarryDarrell
{quote} I don't know. They can sell their claims to some 'russian' incasso service for 20 cent the dollar. Wouldn't get them all the money they're owed, but the people with negative account won't have a grand old time either. I for one would apply to take over their german claims, would be a nice hobby to persue while trading the daily charts...
They could sell the accounts to Vlad Putin and that still wouldn't make people, "Have to Pay"!

The further the broker/collection agent is away from home soil, the harder it will be.

What are they gunna do?
Keep phoning?
Spam your email box?

Ninja Please!

Running a shake down as a hobby does actually sound intriguing, but anybody that'd buy these accounts for a penny to dollar is gunna lose money. After that, it still won't put FXCM back into the contenders ring with anybody serious enough about trading.

It's a shit deal all around...I have nothing personal against FXCM and really don't have a dog in this fight...for me, this is now something to fill the day with.

I don't want to see traders lose, not on this scale.
I don't want to see the impact on market/brokers, knowing full well about the possibility of new market regulations.
And...
I'm sure if we could all hop into a time machine, we'd all love to change history.

But that ain't gunna happen.

What is, already is...

And knowing what happened and the possibilities are the only thing that we can actually gain from this.
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #360
  • Jan 23, 2015 9:03am Jan 23, 2015 9:03am
Care to chime in, Jack?
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Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
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