CMC Complaint & Ombudsmans Response

[gle101]

Gle – I don’t wish to sound rude but what you are saying is largely irrelevant. Your argument doesn’t tackle the invalid opening of a contract (ie the closing side of the bet) which the firm is attempting to enforce against the client. Where the market went next does not make the disputed contract any less or more valid since its validity can ONLY be proved by showing that it was formed in a manner specified in law (ie contract = offer + acceptance).

Steve.

No problem Steve, what the court will probably refer to is a "common sense" approach. Did the action taken by the SB inflict any damage to the client, at the moment they close the position. The answer is no (besides the spread for opening a new position). So I frankly cannot see how he can be successful in pursuing such a case. However, I am not an expert in contract law, it might make a difference if the contract is regarded as a financial instrument, e.g. CFDs.

 

[stevespray]

No problem Steve, what the court will probably refer to is a "common sense" approach. Did the action taken by the SB inflict any damage to the client, at the moment they close the position. The answer is no (besides the spread for opening a new position). So I frankly cannot see how he can be successful in pursuing such a case. However, I am no expert in contract law, it might make a difference if the contract was regarded as a financial instrument, e.g. CFDs.

The contract is regarded as a 'financial intrument' by means of the Financial Markets Act which specifies that losses and gains from dealing in such instruments are legally enforable debts.

The court cannot determin whether damage was inflicted to the client or not. Instead they will look at the clients relationship with the firm - the firm specifies in its T&Cs that the relationship is strictly 'execution only' - the firm therefore exceeded its authority if what is alleged took place.

The reason I'm suggesting this approach is because the firm will have trouble refuting the clients claim. If the firm accept the allegation and admit that they made a mistake then there are no grounds to enforce the contract which closes the clients bets.

Steve.

PS You also contradict yourself - You ask if the closing of the bet inflicted any damage on the client and suggest that answer is "No" yet in your next breath you admit that it would of cost him at least the spread - so the answer is actually "Yes"!

 

[tradernew]

Tradernew - The market is now significantly higher now than it was on the dates you mention. If I was in your position I would write to the firm and specify that you require them to remove the invalid contract note(s) which they have added to your account. Specify that you dispute the grounds on which the closing contract was formed and ask them to explain their grounds for enforcing the contract note(s).

Steve.

I know but, i have given up expecting any sensiable arguments from FOS. Believe me if you see the full details, you will see, it is just a comedy pruduced by FOS.

 

[stevespray]

I know but, i have given up expecting any sensiable arguments from FOS. Believe me if you see the full details, you will see, it is just a comedy pruduced by FOS.

Dont write to the FOS. Instead write directly to CMC. Be sure to specify that you feel that the closing contract note is not valid and not formed in line with the proceedure laid out in the firms Terms Of Business.

 

[tradernew]

Dont write to the FOS. Instead write directly to CMC. Be sure to specify that you feel that the closing contract note is not valid and not formed in line with the proceedure laid out in the firms Terms Of Business.

Thanks, I will write to P.Cruddas as last resort to resolve the issue before it goes to Court and press. See what happens!

 

[gle101]

The contract is regarded as a 'financial intrument' by means of the Financial Markets Act which specifies that losses and gains from dealing in such instruments are legally enforable debts.

The court cannot determin whether damage was inflicted to the client or not. Instead they will look at the clients relationship with the firm - the firm specifies in its T&Cs that the relationship is strictly 'execution only' - the firm therefore exceeded its authority if what is alleged took place.

The reason I'm suggesting this approach is because the firm will have trouble refuting the clients claim. If the firm accept the allegation and admit that they made a mistake then there are no grounds to enforce the contract which closes the clients bets.

Steve.

PS You also contradict yourself - You ask if the closing of the bet inflicted any damage on the client and suggest that answer is "No" yet in your next breath you admit that it would of cost him at least the spread - so the answer is actually "Yes"!

No need to get personal Steve.
I give my personal view point on this issue, I am not an expert on this subject, or claim to be. Apparently you regard yourself being an expert in this area, and claiming to have good insight in these matter, and how the court rules is such cases. I am on the other hand not sure at all about the outcome of such a case. But, I doubt very much it will be in favor of the client.

 

[stevespray]

No need to get personal Steve.
I give my personal view point on this issue, I am not an expert on this subject, or claim to be. Apparently you regard yourself being an expert in this area, and claiming to have good insight in these matter, and how the court rules is such cases. I am on the other hand not sure at all about the outcome of such a case. But, I doubt very much it will be in favor of the client.

Sorry gle I didnt mean it to sound personal:cheesy:

I was just pointing out a number of aspects. I do have a fair bit of experience with this kind of contract based law. A couple of my friends are contract lawyers.

What this case does illustrate are the potential risks that certain firms can and do take. Let us just suppose for a moment that our friend Tradernew does present a valid arguement and that he can demonstrate that the closing contract note isn't actually enforcable. The law actually allows him SIX YEARS to bring a claim! Imagine how far a market can move. All this might sound very far fetched but what can the firm actually do to get around the disputed closing contract? They've left themselves in a very risky position by not actually settling the matter with the client. The firm would normally write something into the T&Cs which specifies a time period in which a client should raise such matters (normally around 2 working days) - in this case the plaintiff has actually raised the issue with the firm and therefore the firm have lost their potential safety net (regardless of the safety net they would still have a job enforcing a contract which a client didn't offer to enter or agree to enter).

It will be very interesting to see where this goes.


Steve.

 

[gle101]

Sorry gle I didnt mean it to sound personal:cheesy:

I was just pointing out a number of aspects. I do have a fair bit of experience with this kind of contract based law. A couple of my friends are contract lawyers.

What this case does illustrate are the potential risks that certain firms can and do take. Let us just suppose for a moment that our friend Tradernew does present a valid arguement and that he can demonstrate that the closing contract note isn't actually enforcable. The law actually allows him SIX YEARS to bring a claim! Imagine how far a market can move. All this might sound very far fetched but what can the firm actually do to get around the disputed closing contract? They've left themselves in a very risky position by not actually settling the matter with the client. The firm would normally write something into the T&Cs which specifies a time period in which a client should raise such matters (normally around 2 working days) - in this case the plaintiff has actually raised the issue with the firm and therefore the firm have lost their potential safety net (regardless of the safety net they would still have a job enforcing a contract which a client didn't offer to enter or agree to enter).

It will be very interesting to see where this goes.


Steve.

Yes, I get your point. It sounds good on paper, but is a spread bet a valid "contract" in which you can claim being applicable under these circumstances? Is there a court precedent, have this kind of case previously been up for trial? Like all the cases on this forum, you get a lot of talk from victimized traders, but no one comes back and actually tell you what came out of it, probably nothing, in most cases as I see it.

 

[tradernew]

Yes, I get your point. It sounds good on paper, but is a spread bet a valid "contract" in which you can claim being applicable under these circumstances? Is there a court precedent, have this kind of case previously been up for trial? Like all the cases on this forum, you get a lot of talk from victimized traders, but no one comes back and actually tell you what came out of it, probably nothing, in most cases as I see it.

if the case goes to court i cant see any problem winning it, becouse FOS has actualy refused all CMC's arguments provided in their "final response". But, then FOS went for "fishing expedition" for the benefit of the firm and came up with with an excuse that money could have been lost days and weeks later when market went down.

i am a trader not a investor. I dont hold any position more than 1-2 days. So, all the evidence supporting my argument actualy provided by FOS and CMC's records. But i agree it might take long time to get a decision from a court.

 

[FormulaOneFan]

This is shocking! Can IG and CMC do this and get away with it? How can they refuse to close when you want to? Why should you have to call when you can do everything online? What's the point of calling it online trading then? Its up to you whenever you want to close you can close. Its unbelievable.

I'm thinking the line "House always wins" could be true to spread betting as well.

 

[gle101]

if the case goes to court i cant see any problem winning it, becouse FOS has actualy refused all CMC's arguments provided in their "final response". But, then FOS went for "fishing expedition" for the benefit of the firm and came up with with an excuse that money could have been lost days and weeks later when market went down.

i am a trader not a investor. I dont hold any position more than 1-2 days. So, all the evidence supporting my argument actualy provided by FOS and CMC's records. But i agree it might take long time to get a decision from a court.

I wish you the best taking this case to court. However, I myself wouldn't be so confident winning such a case. The case brought to court, will cost you considerble amount of money, if it turns out you will lose the case.

 

[firscall]

This is shocking! Can IG and CMC do this and get away with it? How can they refuse to close when you want to? Why should you have to call when you can do everything online? What's the point of calling it online trading then? Its up to you whenever you want to close you can close. Its unbelievable.

I'm thinking the line "House always wins" could be true to spread betting as well.

Do IGIndex also play these types of games?

 

[ns1000]

Do IGIndex also play these types of games?

All firms will have maximum deal sizes at one price, just as all markets do. The difference here is that CMC wouldn't make a price, or work an order to exit the market. In my experience, most decent firms don't stoop to this, and will make a price to let you close.

The majority of traders never have positions large enough for this to be a problem and their trades get filled automatically with no dealer even noticing them. While the OP undoubtedly had a problem (and if what he said is true, he seems to have been shafted), some of the other posters seem more intent on rubbishing the firms without any evidence.

 

[firscall]

All firms will have maximum deal sizes at one price, just as all markets do. The difference here is that CMC wouldn't make a price, or work an order to exit the market. In my experience, most decent firms don't stoop to this, and will make a price to let you close.

The majority of traders never have positions large enough for this to be a problem and their trades get filled automatically with no dealer even noticing them. While the OP undoubtedly had a problem (and if what he said is true, he seems to have been shafted), some of the other posters seem more intent on rubbishing the firms without any evidence.

Thanks. I have a lot of experience with CMC (joined in the deal4free days) and have experienced just about every trick in the book. I think IG are much better.

SSINGE, I like the old school idea...lol...seriously though it only takes one nutter who has been played consistently (blown account etc) to get it in their mind to extract some fatal revenge. It amazes me that it hasn't happened already, such a violent act would be wrong but the same thing has already occurred in the USA.

 

[tradernew]

"The responce from the FOS dose not believe that CMC would send a message to telephone dealer as they are an online execution only company."


Dear Tom Tom

Many times in the past, I had online message from CMC requesting me to call the dealing desk to execute the trades. If that is what you are referring to, I have records of them. You can have those records if you want.

See below:



RBS (UK) 30,000.00 244.50 Market May 28, 2008 8:59:28AM May 28, 2008 10:59:28AM Please call dealingdesk to trade

 

[TomTom]

Hi Tradernew,
Hey CMC let me open postions online but then did not let me close them online when it come to take profits.
Due to the fact this company in 2007 did not record all calls to its office desks it could not be prooved if I actually phoned the desk. ( my phone company did not log calls under a cirtain amount so I had no proof either )
check your email .
Tom

 

[tradernew]

Hi Everyone,

There is good pressure building on FOS, FSA and CMC at the moment to answers the question which was raised by many cases against them... I can’t disclose all the information for time being, but I will do so in the future.

If anyone else had any problem with CMC, I would like to know asap. I also would appreciate if anyone who worked for this company can actually confirm (on or off the record) some of the issues raised by clients.

All I am looking for facts and truth, nothing else.

Thanks

 

[Trader333]

It is not a bad idea to use Skype when you make calls like this and record the conversation which Skype allows. You then have a record of what was said.


Paul

 

[Splitlink]

Hi Tradernew,
Hey CMC let me open postions online but then did not let me close them online when it come to take profits.
Due to the fact this company in 2007 did not record all calls to its office desks it could not be prooved if I actually phoned the desk. ( my phone company did not log calls under a cirtain amount so I had no proof either )
check your email .
Tom

You were fortunate that you were not closing a position that went into a loss. I was with City Index several years ago, before online trading and, the first I knew, they asked for margin, having cleaned my account by several thousand pounds. . They recorded calls, but the onus was on the caller to provide the time, as they said that, as there were so many, they would never find mine-. Telefonica turned up trumps for me and I was able to prove my case.

From the UK. calls are not taped, or were not then, so I was very lucky to have made an international one. Naturally, that was the end of a good relationship and I closed my account. After all, it only takes one error like that!! Everyone who does telephone trading should take note of the time and, after that nasty shock, I used to phone again , at the end of the day, to make sure I was flat.

 

[gle101]

It is not a bad idea to use Skype when you make calls like this and record the conversation which Skype allows. You then have a record of what was said.


Paul

Yes, an exellent suggestion, this in order to keep a record of the conversation.