Broker Fraud

[Bryan Greenham]

1/ On the 9/8/18 I bought via my SIPP 852 shares of ETf Oil Securities CARP at the price of 1171.1 for a consideration of £9977.77.

2/ On the morning of 16/8/18 at approximately 11.30am I raised the stop loss of the share to 1100.

3/ By 12:08 that morning 16/8/18 my share had been stopped out and sold at the price of 1085.75 for an immediate loss to me of £751.08 and an opportunity loss of over £2000. Nowhere on the broker website or on the internet, the LSE, Bloomberg including the Wisdom Tree product sponsor of CARP does anyone show the price going that low.

4/On examining the price action on the Exchange on which the broker placed my trade I have found what I believe to be clear evidence of collusion and price fixing by placing my trade on the smaller exchange which has low trade volume.
This allows someone at my brokerage to pass on my Stop Loss level information to the Exchange which allows their broker to “gun” for my stop by artificially lowering the price for a short period of time to pick up my shares cheaply and then raise the price again. Something that has not and will not happen on the larger and more liquid LSE.

7/ Exchange prices for the day.

16/08/2018 15:37 213 1207.45
16/08/2018 14:54 40 1208
16/08/2018 12:56 5 1193.75
16/08/2018 12:37 417 1085.75 *
16/08/2018 12:08 852 1085.75 *
16/08/2018 11:23 83 1211.075

Miraculously for 48 minutes the price goes down to 1085.75 allowing the exchange/broker to pick up my lot of 852 shares and somebody else’s 417 block of shares cheaply. From the data obtained from Nex thus far out of 51 trades since 9/8/18 the price never went below 1158.95 and this was for 42 mins and then mysteriously back exactly to its previous 1203.525.

I have complained to all and sundry to no effect. I welcome any advice.

 

[Aston1st]

1/ On the 9/8/18 I bought via my SIPP 852 shares of ETf Oil Securities CARP at the price of 1171.1 for a consideration of £9977.77.

2/ On the morning of 16/8/18 at approximately 11.30am I raised the stop loss of the share to 1100.

3/ By 12:08 that morning 16/8/18 my share had been stopped out and sold at the price of 1085.75 for an immediate loss to me of £751.08 and an opportunity loss of over £2000. Nowhere on the broker website or on the internet, the LSE, Bloomberg including the Wisdom Tree product sponsor of CARP does anyone show the price going that low.

4/On examining the price action on the Exchange on which the broker placed my trade I have found what I believe to be clear evidence of collusion and price fixing by placing my trade on the smaller exchange which has low trade volume.
This allows someone at my brokerage to pass on my Stop Loss level information to the Exchange which allows their broker to “gun” for my stop by artificially lowering the price for a short period of time to pick up my shares cheaply and then raise the price again. Something that has not and will not happen on the larger and more liquid LSE.

7/ Exchange prices for the day.

16/08/2018 15:37 213 1207.45
16/08/2018 14:54 40 1208
16/08/2018 12:56 5 1193.75
16/08/2018 12:37 417 1085.75 *
16/08/2018 12:08 852 1085.75 *
16/08/2018 11:23 83 1211.075

Miraculously for 48 minutes the price goes down to 1085.75 allowing the exchange/broker to pick up my lot of 852 shares and somebody else’s 417 block of shares cheaply. From the data obtained from Nex thus far out of 51 trades since 9/8/18 the price never went below 1158.95 and this was for 42 mins and then mysteriously back exactly to its previous 1203.525.

I have complained to all and sundry to no effect. I welcome any advice.

Write to them and informed them this is an "Official" Complaint, they will have about six weeks to respond, if you are not satisfied you then are free to contact the Financial Ombudsman Compensation Service.

Next change your broker and trade with a proper broker on an exchange not OTC.

 

[tomorton]

Agree with Aston, I wanted to reply but was struggling to not sound too smart.


If you don't mind, actually, what was the motivation that drew you towards such a specialist area? Do you have oil industry experience maybe, or previous financial sector experience?

 

[Bryan Greenham]

Thanks Aston 1st and Tomorton. I am awaiting a reply from the financial ombudsmen. The broker who is the largest UK SIPP provider brushed me off wiith a bs reply. The trade was not OTC but placed On the NEX exchange. The broker lied and stated that once the order is placed they have no control over where it is traded. Untrue, I subsequently demanded that a new order be placed on the LSE and this was done.
My reason for trading the etf was purely technical. I had made previous profits and would would have continued to profit + 40% under LSE prices. Wisdom Tree the etf provider emailed a Bloomberg screen shot of the days prices and trades showing that the price went no where near my stop, with a 70 point breathing space.
I had never heard of NEX and all the info on the broker site and Wisdom Tree blurb states that the etf is traded and reported on the LSE. I suspect the broker has a buddy over at the exchange and passed on my stop level. I questioned the broker on the day asking why I have been stopped stating that nowhere on the internet nor their site shows prices going that low. He lied and stated that an IT fault showed delayed prices and that the full extent of the price move would be shown at the close. The closing prices end of day on the broker site showed that prices barely moved that day as it was reporting LSE prices. The subsequent bs letter from the broker ignored this point. I wish I had recorded the countless conversations I had that day with various brokers and advisory staff as I caught them in their lies and they spluttered and coughed as they transferred me around the company. I only have a written transcript of some of it but I know they record conversations. The strange NEX price movements within 30 minutes of my stop raising speak for themselves. The LSE, Bloomberg, yahoo, Google and the broker site show no such movement. Only one other block of shares was picked up by the quick dip on the NEX, I would be interested to know if they were placed by my broker as well.

 

[Nowler]

Seems like such a large risk for so little reward.
If they were found to be fraudulent, what might the outcome likely be?

Also, I use an app that records all my phone calls.
I have it set to exclude friends and family of course, but it's quite useful for instances such as yours. Not sure as to the legality of it with the new GDPR rules ( My phone has a security lock on it, and then the app requires a code to open), but I find them useful to go back over for clarification.

 

[Bryan Greenham]

Hi Nowler, the only risk turned out to be the dodgy broker and exchange. My position was protected with a stop, the position was £2k in profit and would have gone on to get 40% more, and I was watching the situation. Imagine my shock when I was stopped out before my eyes out but the market hadn't moved.
All because the largest uk retail broker punted me out to a minor exchange and gave away the location of my stop point.

 

[Nowler]

Hello Sir,
What I meant was your broker taking so much risk (if they are fraudulant) for so little reward.

Getting found to be fraudulent would surely result in significant repercussions. So to risk that for what is essentially pocket change for a broker, seems beyond wreckless.

I'm definitely interested to see how this plays out for you.

I remember back when I started, I got stopped out of a position even though price never went to the level of my stop. I contact my broker asking how this could be so. It took me some time to understand that it was the widening of the spread that took me out. I was mortified when I understood how stupid I was being. I was convinced that my broker was pulling a fast one on me hahah

Anyway, let us know what happens my friend.

 

[Bryan Greenham]

Totally agree, Nowler. It would be absolutely stupid for a broker to take that risk, but prisons are full of people who think they are smarter than the rest. But this is no widenening spread, bid offer mistake.
I was lied to a number of times by the broker and the exchange is the only one to record not only price movement that day but a large one lasting only 40 mins. The exchange can set any price it wants but an investigator would want to see a large sell order that motivated them to drop their price. I reckon they had a large buy order, picked up my shares for a bargain on a quiet no movement day and topped up their profit. Like I said previously, the stock was in an uptrend and increased another 40%.
No one but that exchange came near my stop price for another 2 months!!

 

[DionysusToast]

7/ Exchange prices for the day.

16/08/2018 15:37 213 1207.45
16/08/2018 14:54 40 1208
16/08/2018 12:56 5 1193.75
16/08/2018 12:37 417 1085.75 *
16/08/2018 12:08 852 1085.75 *
16/08/2018 11:23 83 1211.075

Miraculously for 48 minutes the price goes down to 1085.75 allowing the exchange/broker to pick up my lot of 852 shares and somebody else’s 417 block of shares cheaply. From the data obtained from Nex thus far out of 51 trades since 9/8/18 the price never went below 1158.95 and this was for 42 mins and then mysteriously back exactly to its previous 1203.525.

I have complained to all and sundry to no effect. I welcome any advice.

Here's what actually happened.

The bid price on the exchange went down to 1085.75 and then someone sold 417 shares.

Your stop does not get triggered unless a trade occurs. So the 417 transaction was not somebody else's shares being picked up cheaply. It's the trade that caused you to get stopped out. Someone decided to take a bad price. Then and only then did your stop trigger.

The bid price moving to 1085.75 had nothing to do with you getting stopped out. It was the fact someone then sold at those prices.

The fact you don't understand that the 417 share transaction is what stopped you out, means you aren't 100% up to speed on how the markets you trade operate.

There are VERY FEW trades at all on that market by the look of it. Showing trade prices does NOT show the prices available to buyers/sellers throughout the day. What you should be looking at are the changes in bids through the day -it is quite possible that all day the bids are swinging up/down 2-300 prices as MMs look to attract sellers.

My guess would be that if you looked at the ACTUAL bid prices - you would see a different picture. The trades do NOT represent prices through the day, just executions. For all you know, they may have been bidding 800-1500 through the day and you are lucky that other trade didn't hit when the bid was 800.

You say "price goes down to 1085.75" - but you don't understand the mechanisms by which prices move. Hence you feel cheated. Your broker is in a no-win situation to be honest as you don't understand how the markets operate. So any explanation is not going to be appreciated until that clicks with you.

 

[Bryan Greenham]

Your quite right Dionysus. I am confused by your explanation. How does a trade at 12:37 of 417 shares stop me out 31 minutes later than when my lot was already traded at 12:08 for 852 shares?

 

[DionysusToast]

Your quite right Dionysus. I am confused by your explanation. How does a trade at 12:37 of 417 shares stop me out 31 minutes later than when my lot was already traded at 12:08 for 852 shares?

Good point - I was reading executions as if they were in order.

So the question back to you - what are the stop order execution rules on that exchange? Do you know?

 

[Bryan Greenham]

Dionysus I was loathe to post on this site as it draws out the lonely nutters eager to impress with their pseudo knowledge and keeness to put others down. It only took a couple of days for you to turn up.

I found your language insulting. You stated:- "The fact you don't understand" & "means you aren't 100% up to speed on how the markets you trade operate" & "you don't understand how the markets operate" & "So any explanation is not going to be appreciated until that clicks with you"; all said by YOU whilst YOU don't even understand a simple time line as copied "in order" directly from the Nex website and explained again by me in my notes. Your whole shtick was to insult me four times combined with a desperate need to impress others with your "market knowledge".

You appear a balanced guy. Stunning arrogance on one shoulder crass stupidity on the other.
I have reported your message so please stop making irrelevant, insulting and pointless comments based on the fact that you can't even read a timeline. A simple schoolboy error by you but I wasn't expecting to converse with schoolboys.
Good day to you Sir.

P.S. "Heres what actually happened" --you can't read timelines!!

 

[DionysusToast]

Dionysus I was loathe to post on this site as it draws out the lonely nutters. It only took a couple of days for you to turn up.
I found your language insulting. Saying "The fact you don't understand" & "means you aren't 100% up to speed on how the markets you trade operate" & "you don't understand how the markets operate" & "So any explanation is not going to be appreciated until that clicks with you"; whilst YOU don't even understand a simple time line as copied "in order" directly from the Nex website and explained again by me in my notes.
You appear a balanced guy. Stunning arrogance on one shoulder crass stupidity on the other.
Please stop making irrelevant, insulting and pointless comments based on the fact that you can't even read a timeline.

P.S. "Heres what actually happened" --you can't read timelines!!

OK - so are you aware of the rules for stop order execution or not?

You are still not aware that the bid & offer prices ARE the prices available to trade. Actual executions do not represent the prices available to buyers and sellers throughout the day. For example - they may have stopped you out because the best offer went below your price.

So looking at executions does NOT tell you where price went.

In respect to your other comments - pretty much every time someone comes here explaining how their broker ripped them off - the broker/exchange was simply operating within the terms & conditions that the trader signed up for.

It's a buyer beware thing.

 

[tomorton]

Appreciate what you say DT, yes, the price someone bid can drag execution prices down, this bid price then disappears from the record. But doesn't that just lead back to the original question? - was the trade based on genuine prices offered or was it a case of spoofing?

 

[Bryan Greenham]

Oh dear the village idiot has turned up again and won't go away until someone plays with him. A simple apology would have sufficed sans the arrogant insulting jibes. Your avatar is perfect. It is used on chemical bottles to denote Toxic and Poisonous. Time to leave this thread. Bye all.

Thank you Nowler and Aston1st for your comments and help.

 

[DionysusToast]

Appreciate what you say DT, yes, the price someone bid can drag execution prices down, this bid price then disappears from the record. But doesn't that just lead back to the original question? - was the trade based on genuine prices offered or was it a case of spoofing?

A reduced bid should not trigger a stop at all. Only an order should - BUT - that presumes specific stop rules. I'm thinking CME.

Obviously, this isn't the CME, so different rules seem to be there.

What the punter needs to know here is quite simple - why did the stop get executed - the broker should be able to point to published rules. It'll either be....

1 - the exchange rules caused the stop
2 - some sort of process at the broker fired the stop based on the bid going way below the stop price - almost a margin call type thing. At that point, it could be that the best Bid was on NEX and it got executed there

First thing to do in this situation is to simply ask why the stop was executed. Based on what rules.

The chances the broker stole his money are close to zero. As has been pointed out - it makes no sense - the risk far outweighs the rewards.

The OP is talking about multiple parties colluding to defraud him of 700 quid. This is a lot less likely than him not being aware of the rules. For sure, he's made 1 rookie mistake of thinking historical executions on a chart represent "price" when the prices available at any one time are NOT on the chart.

 

[DionysusToast]

Appreciate what you say DT, yes, the price someone bid can drag execution prices down, this bid price then disappears from the record. But doesn't that just lead back to the original question? - was the trade based on genuine prices offered or was it a case of spoofing?

Re: spoofing...

You cant spoof the inside bid down in theory...

But if you are the sole MM active on any specific illiquid market, you have a hell of a lot of scope for pushing stuff about.

Sent from my SM-A720F using Tapatalk

 

[tomorton]

Re: spoofing...

You cant spoof the inside bid down in theory...

But if you are the sole MM active on any specific illiquid market, you have a hell of a lot of scope for pushing stuff about.

Sent from my SM-A720F using Tapatalk

This is unfamiliar territory where I never tread my trading boots.

So.......... you think maybe that COULD have happened here?

 

[DionysusToast]

This is unfamiliar territory where I never tread my trading boots.

So.......... you think maybe that COULD have happened here?

Hard to know without the broker telling why the stop was triggered.

The broker should be able to reference published rules.

It's a good lesson in avoiding illiquid markets for sure. Wouldnt happen on SPY...

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