CMC Complaint & Ombudsmans Response

[stevespray]

I don't see this as a competition issue as such - more an issue where the kids are put in charge of the cookie jar.

Lets look at this more closely; spread bet firms first create their own markets (based on the underlying or otherwise) and then allow punters to speculate against those prices. Then, if they dont like the look of a clients position, they disrupt or delay the clients dealing on those positions. Quite simply certain firms (no names mentioned) will try and disrupt trading in such a manner as to make you less / un profitable. If, having tried one or two methods of disruption, a particular client is still profitable then even more disruptive methods are used. In TomTom's case he says he phoned the firm but they still wouldn't allow dealing even though the firms market was open and a quote was available - not allowing a client to close even part of a larger position would appear to be mistreatment. In my mind this raises two questions; i ) is the firm allowed to do this (entitlement under T&C's), and ii ) is any such entitlement fair given that such an entitlement would basically give the firm a right, at anytime, to block a clients attempts to open or close trades purely based on the firms opinion and, as such, this opinion could be made up, at least in part, by the financial costs which the firm could incur by allowing the client to close / open a trade at a particular moment in time.

If this were true then it would more or less Guarantee that a firm could make a profit.

Steve.

 

[gle101]

I don't see this as a competition issue as such - more an issue where the kids are put in charge of the cookie jar.

Lets look at this more closely; spread bet firms first create their own markets (based on the underlying or otherwise) and then allow punters to speculate against those prices. Then, if they dont like the look of a clients position, they disrupt or delay the clients dealing on those positions. Quite simply certain firms (no names mentioned) will try and disrupt trading in such a manner as to make you less / un profitable. If, having tried one or two methods of disruption, a particular client is still profitable then even more disruptive methods are used. In TomTom's case he says he phoned the firm but they still wouldn't allow dealing even though the firms market was open and a quote was available - not allowing a client to close even part of a larger position would appear to be mistreatment. In my mind this raises two questions; i ) is the firm allowed to do this (entitlement under T&C's), and ii ) is any such entitlement fair given that such an entitlement would basically give the firm a right, at anytime, to block a clients attempts to open or close trades purely based on the firms opinion and, as such, this opinion could be made up, at least in part, by the financial costs which the firm could incur by allowing the client to close / open a trade at a particular moment in time.

If this were true then it would more or less Guarantee that a firm could make a profit.

Steve.

Of course they are not allowed to do it, in the way TomTom described it. This is not the issue here. Madoff was not either allowed to do it, still he did it. This doesn't help, if you are a victim. I think, increasing competition and the MiFID financial directives will take care of the worst case scenarios, when it comes to limit clients ability to trade. Still, I would not let the Market Makers decide everything for me, it is just to risky, if a lot of money is at stake.

 

[Phil Mibbutz]

If this were true then it would more or less Guarantee that a firm could make a profit.

Steve.

As it seems that some SB companies only accept trades that have already gone against the punter, and can be hedged, if necessary, the bookies will always profit unless they make a mistake, which just might be the case here.

 

[stevespray]

Of course they are not allowed to do it, in the way TomTom described it. This is not the issue here. Madoff was not either allowed to do it, still he did it. This doesn't help, if you are a victim. I think, increasing competition and the MiFID financial directives will take care of the worst case scenarios, when it comes to limit clients ability to trade. Still, I would not let the Market Makers decide everything for me, it is just to risky, if a lot of money is at stake.

...But you place huge faith in MiFID - Almost like the firms are going to read it and then submit 100% to it and its ethos. I just don't see it that way plain and simple. I've seen it time and time again where FSA regulated firms insert clauses into T&C's which are purposely designed to circumvent certain FSA regulations or directives. Look at FSA Conduct Of Business (CoB) as an example. If I'm not mistaken you'll see that firms must be able to demonstrate that delays in client execution (in respect of 'execution only' business) are to the benefit of clients and not the firm - yet firms acknowledge that they need to place certain types of clients on manual execution. This type of execution creates a delay in execution which is designed to benefit the firm and not the client.

So who enforces FSA regulations and the MiFID directives of which you speak?

TomTom's battle is a battle over what you might term a 'level playing field' - in his case he claims that he should be able to either log into the firms online platform (or ring the firms dealing lines) and close his trades at exactly the moment that he chooses and not have to wait for a moment which is financially 'more suitable' for the firm.


Steve.

 

[gle101]

...But you place huge faith in MiFID - Almost like the firms are going to read it and then submit 100% to it and its ethos. I just don't see it that way plain and simple. I've seen it time and time again where FSA regulated firms insert clauses into T&C's which are purposely designed to circumvent certain FSA regulations or directives. Look at FSA Conduct Of Business (CoB) as an example. If I'm not mistaken you'll see that firms must be able to demonstrate that delays in client execution (in respect of 'execution only' business) are to the benefit of clients and not the firm - yet firms acknowledge that they need to place certain types of clients on manual execution. This type of execution creates a delay in execution which is designed to benefit the firm and not the client.

So who enforces FSA regulations and the MiFID directives of which you speak?

TomTom's battle is a battle over what you might term a 'level playing field' - in his case he claims that he should be able to either log into the firms online platform (or ring the firms dealing lines) and close his trades at exactly the moment that he chooses and not have to wait for a moment which is financially 'more suitable' for the firm.


Steve.

Remember, the SB companies must also protect themselves. This is done through the T&C's. You have to look at the number of transactions being carried out by the SB companies. I do not defend the company in question, more strict regulation is on the way. It will be the result of the financial meltdown we have experienced lately. This will also effect the regulators put in place. However, ultimately the most important ingredient resulting in "fair play" by the SB companies, will be increased competition. You simply cannot put all your faith in the company you are trading with, stripping yourself from all the responsibility.

 

[stevespray]

Remember, the SB companies must also protect themselves. This is done through the T&C's. You have to look at the number of transactions being carried out by the SB companies. I do not defend the company in question, more strict regulation is on the way. It will be the result of the financial meltdown we have experienced lately. This will also effect the regulators put in place. However, ultimately the most important ingredient resulting in "fair play" by the SB companies, will be increased competition. You simply cannot put all your faith in the company you are trading with, stripping yourself from all the responsibility.

That is fair enough but there is surely a difference between a firm 'protecting themselves' and a firm 'acting unfairly' (or in breach of T&C's which does happen is some cases)?

In TomTom's case he says that the firm in question were quoting a market but refused to allow him trade against the quotation in any size. In effect that the same as having two completely differing quotes for one market - one quote for the rest of the client base and one quote for a client closing a clearly profitable position. If the firm is offering their quotation and then not allowing trade to pass through at that quote then questions should immediately be asked.

Steve.

 

[gle101]

That is fair enough but there is surely a difference between a firm 'protecting themselves' and a firm 'acting unfairly' (or in breach of T&C's which does happen is some cases)?

In TomTom's case he says that the firm in question were quoting a market but refused to allow him trade against the quotation in any size. In effect that the same as having two completely differing quotes for one market - one quote for the rest of the client base and one quote for a client closing a clearly profitable position. If the firm is offering their quotation and then not allowing trade to pass through at that quote then questions should immediately be asked.

Steve.

As I said before, it not a issue whether or not the SB company in question have acted accordingly to the T&C agreement. Apparently they have not this time, if what TomTom says is true. There are questions though. TomTom stated previously that he accused CMC for building up the position in the first place. He apparently would not like to take full responsibility for his position. Anyway, miscreants within the SB will continue to affect some traders, despite any tight regulation in place.

I feel you are way too coloured by the traders' viewpoint on these issues. So much so that, when major technical price feed error played an important part, you felt that the trade should favor the trader.

 

[stevespray]

I feel you are way too coloured by the traders' viewpoint on these issues. So much so that, when major technical price feed error played an important part, you felt that the trade should favor the trader.

I've had a quick read back and so far as I can see there is no mention of a "major technical price feed error" in TomTom's initial accounts of what occured. He appears to state that the firm provided quotations but then refused any order which he tried to place based on said quotes. Even smaller sizes were refused.

Steve.

 

[gle101]

I've had a quick read back and so far as I can see there is no mention of a "major technical price feed error" in TomTom's initial accounts of what occured. He appears to state that the firm provided quotations but then refused any order which he tried to place based on said quotes. Even smaller sizes were refused.

Steve.

Steve, you know very well I am not referring to this thread.

 

[stevespray]

Sorry - We were talking at cross purposes there. I may have expressed that on another thread but your comment, on its own, is made out of context.

Steve.

 

[gle101]

Sorry - We were talking at cross purposes there. I may have expressed that on another thread but your comment, on its own, is made out of context.

Steve.

No problem, I try to be more explicit when I refer to another thread.

 

[firscall]

If i were you (and on the basis that this has now gone legal) I'd say nothing publically in relation to your case. In fact IMHO you may have ruined what slim chance you had by your constant flaming of CMC on such an open forum with so many contributors, particularly when you bear in mind how high this site and all its posts rank in google searches.
In point of fact you may, if you don't handle yourself very carefully from here on in, find yourself at the end of an action by CMC.

Don't be bloody stupid!

 

[firscall]

I think CMC are unlikely to drag up the issue of posts on a site like this and the forum contents. Whether the statements made on here can be used as evidence in court is highly debatable, and even if admitted, how much credence will be give to our ramblings?

Ultimately comes down to the clear evidence that Tomtom is able to produce himself and or garner through others either via this site or elsewhere. I still suspect CMC will likely settle out of court if the case put forward is solid enough but not admit wrongdoing etc. They'd rather do that than get into a long drawn out thing just to wear Tomtom down - they wouldn't spend all that money on defence when they can settle out of court for much less and attach a Tomlin order or something like that.

At last some common sense.

TomTom, Ignore the detractors as they probably envy that you can afford to place £2K trades. CMC are a bunch of crooks, I had a very similar experience to you probably about 5 years ago, unfortunately I did have your courage to take it very far plus the opportunity cost was too high. Keep on fighting the good fight.

 

[firscall]

As I said before, it not a issue whether or not the SB company in question have acted accordingly to the T&C agreement. Apparently they have not this time, if what TomTom says is true. There are questions though. TomTom stated previously that he accused CMC for building up the position in the first place. He apparently would not like to take full responsibility for his position. Anyway, miscreants within the SB will continue to affect some traders, despite any tight regulation in place.

I feel you are way too coloured by the traders' viewpoint on these issues. So much so that, when major technical price feed error played an important part, you felt that the trade should favor the trader.

"He apparently would not like to take full responsibility for his position."

I interpreted that as TomTom asking 'why let me open the positions if you're not going to let me close it.'

 

[Black Swan]

At last some common sense.

TomTom, Ignore the detractors as they probably envy that you can afford to place £2K trades. CMC are a bunch of crooks, I had a very similar experience to you probably about 5 years ago, unfortunately I did have your courage to take it very far plus the opportunity cost was too high. Keep on fighting the good fight.

Yep, that's it, I'm just green with envy :whistling

 

[tradernew]

Is fos bais to firm (cmc)

I had a similiar promlem with FOS in a case against CMC. I have sent to FOS my last response with a title of "Response to FOS playing "Three Monkeys" see no evidence, hear no evidence and know no evidence.Evidence and facts were very clear and undisputable.

Anyway, my case will go to court against CMC and after the outcome of the court, i will consider taking legal action against FOS and FSA for "Professional Misconduct" charges.

 

[Black Swan]

I had a similiar promlem with FOS in a case against CMC. I have sent to FOS my last response with a title of "Response to FOS playing "Three Monkeys" see no evidence, hear no evidence and know no evidence.Evidence and facts were very clear and undisputable.

Anyway, my case will go to court against CMC and after the outcome of the court, i will consider taking legal action against FOS and FSA for "Professional Misconduct" charges.[/QUOTE]

 

[stevespray]

You’ve hit the nail on the head.

My dealings with the FOS (and indeed the dealings of a number of friends) have shown that the FOS will always find a reason to ignore what seems like cast iron evidence. I confronted an FOS adjudicator on this matter once and the conversation became very awkward for him. He basically terminated the conversation on the grounds that the FOS didn’t have to provide, “a point by point rebuttal of all the evidence against the firm in question.” – In other words, if the evidence is so strong then they’ll simply ignore it, not comment directly on it and then circumvent it in their final response to the complaint. In their response to one of my complaints they basically spent four sides of A4 arguing that black was actually white – they basically spent most of the response specifying how no advantage could be gained by a firm holding an order for almost one minute in the Dow Futures market. It was a work of art I can tell you. Effectively the adjudicator completely invalidates the Black-Scholes pricing method for options!! Quite a remarkable piece of work.

Good luck,
Steve.

 

[ns1000]

You never know, this one might actually walk the walk.

 

[tradernew]

You’ve hit the nail on the head.

My dealings with the FOS (and indeed the dealings of a number of friends) have shown that the FOS will always find a reason to ignore what seems like cast iron evidence. I confronted an FOS adjudicator on this matter once and the conversation became very awkward for him. He basically terminated the conversation on the grounds that the FOS didn’t have to provide, “a point by point rebuttal of all the evidence against the firm in question.” – In other words, if the evidence is so strong then they’ll simply ignore it, not comment directly on it and then circumvent it in their final response to the complaint. In their response to one of my complaints they basically spent four sides of A4 arguing that black was actually white – they basically spent most of the response specifying how no advantage could be gained by a firm holding an order for almost one minute in the Dow Futures market. It was a work of art I can tell you. Effectively the adjudicator completely invalidates the Black-Scholes pricing method for options!! Quite a remarkable piece of work.

Good luck,
Steve.

I know the feeling. In one conversation, his argument was so incrediable! i have to ask to adjudicator, if he was drunk or not.