CMC Complaint & Ombudsmans Response

[tradernew]

Below is a few paragrahp in my response to FOS



""This firm (CMC) is trading against their client. It means, client loss is CMC’s profit, therefore CMC has reason to make the trading conditions difficult and will benefit if the client lose money. That was the case in April liquidations and also in May liquidations. If they disclosed the correct information, that funds were with the firm, then loss wouldn’t have occurred for my part. But my loss was the profit for CMC.

CMC denies, they are trading against their clients. (Look at the online communications and phone conversation I had with CMC).

But CMC was lying all the times. Do I have the evidence to proof that? Yes, Sir. I have sent the evidence to you. What was it? It was the words, written by CMC’s own solicitor presented in a document filed in a High Court Case (all the detailed info regarding the name, case number were sent to you, Mr Ombudsman). Read the paragraph below:

"In the event of a client's trade with CMC being a successful trade it is CMC who pays the profit to the client and thereby suffers the loss. Conversely, an unsuccessful trade by the client would result in a profit for CMC. ..."

Mr Taylor also refuted my claim that CMC is trading against their client and told me that if I can prove this, he might reconsider his assessment.

So, Mr. Ombudsman, I can understand that you don’t take my word for evidence but how can you refute the evidence produced by the Firm’s own solicitor? Do you think CMC’s solicitor is lying to High Court? Can there possible be better evidence then this, to prove CMC was continuously and deliberately lying to their clients.

Mr Ombudsman, evidence I have provided for my allegation is undisputable, is beyond any doubt. Evidence produced by the CMC’s representative in a written document which was filed in High Court.

If you are disputing this as evidence, I suggest you and adjudicators to find a dictionary and read what the meaning of evidence is. There is nothing wrong with the evidence, problem is your and adjudicators capability to understand the evidence.

I am sorry to say that, but with a manner and method you and adjudicators have used in this case, you can’t even solve a dispute in a “sweet shop”, let alone solving a financial dispute case. ""

 

[stevespray]

Tradernew - Would you care to outline the basis of you complaint about CMC? What did they do?

Steve.

 

[Claudia123]

Am I missing the point here guys?? Spread betting firms do trade against the client that is the whole point of their business. They are bookies that's what they do. Haven't read all the post so sorry if being stupid but taking on CMC is a non starter unless you got huge bank account (if you have pm me !!). If you don't like the way these firms operate just don't use them.

 

[tradernew]

Tradernew - Would you care to outline the basis of you complaint about CMC? What did they do?

Steve.

Well, i wouldnt go into details, but CMC have lost the funds (75k) then liquidated the positions, but in the morning they have found the funds and accepted the error, but refused to correct their mistake, (it wasnt an error, it was a lie).

I will disclose all the info in the future for the benefit of other traders or nvestors to see how CMC and FOS has handled this case.

 

[Claudia123]

Well, i wouldnt go into details, but CMC have lost the funds (75k) then liquidated the positions, but in the morning they have found the funds and accepted the error, but refused to correct their mistake, (it wasnt an error, it was a lie).

I will disclose all the info in the future for the benefit of other traders or nvestors to see how CMC and FOS has handled this case.

Be interesting to hear CMC's side. 75k is a lot. But you say they accepted the error so where is the problem. If you have that in writing there is no issue no judge in the land will oppose that.

 

[stevespray]

taking on CMC is a non starter unless you got huge bank account

Claudia - This is the whole reason that the FOS exists. The idea is that they will provide a service which looks into complaints at no cost to the plaintiff. Outcomes are binding on the firms. Effectively this should synthetically be like taking a firm into court. The problem is that the FOS staff don't really like 'going out on a limb' and deciding that a firm has acted unfairly. In the first case which I ever prepared the FOS accepted evidence which the firm provided which stated that it was the firms belief that it could impose terms and conditions on a client which weren't physically listed in the T&C of the Customer Agreement. The T&C physically stated that the firm must give all clients 14 days notice if it wished to impose additonal T&Cs but the FOS decided that it would ignore that bit because it made things too complicated. This was just one part of the evidence which was submitted. The FOS would basically try and discredit rock solid evidence from me whilst accepting outragous statements from the firm.

Having spoken with FOS staff several times at length (one conversation lasting 90 minutes) I would suggest that many of them lack even a basic knowledge of law and compound that with having no real knowledge about financial markets. My guess is that the FOS doesn't pay that much and therefore anyone with any degree of knowledge in this field would end up with a better paid job working in The City itself rather than a toothless regulator.


Steve.

 

[tradernew]

Be interesting to hear CMC's side. 75k is a lot. But you say they accepted the error so where is the problem. If you have that in writing there is no issue no judge in the land will oppose that.

:clap: That is what i thought, but it has been more than a year and prices changed, according the logic appiled by the Ombudsman; money from those trades could have been lost in later days and weeks as the market went down.

Amazing, isnt is?

 

[tradernew]

Below is a paragrahp takn from my response to FOS. I hope answers your question claudia123


"Despite all the “fishing expedition”, imaginations, disregarding facts, fortune telling, ridiculous arguments, laughable statements by the Adjudicators and Ombudsman, even they can’t reject the fact, that THE FIRM WAS IN ERROR. These are their words “premature liquidations” of the positions, “firm demonstrably in error” etc.

But, if the firm was in error by liquidating the positions and therefore creating the loss, what is the problem for Adjudicators and Ombudsman asking the firm to pay the loss (which was profit for the firm) that they created. Problem is the Adjudicators and Ombudsman like to play “Three Monkeys”, don’t want to see, hear or know the facts and evidences. They have started the investigation with assumptions and finish it with assumptions. How about the facts? As far as I can see from the arguments in their assessment, facts are irrelevant. "

 

[GammaJammer]

Below is a few paragrahp in my response to FOS



""This firm (CMC) is trading against their client. It means, client loss is CMC’s profit, therefore CMC has reason to make the trading conditions difficult and will benefit if the client lose money. That was the case in April liquidations and also in May liquidations. If they disclosed the correct information, that funds were with the firm, then loss wouldn’t have occurred for my part. But my loss was the profit for CMC.

CMC denies, they are trading against their clients. (Look at the online communications and phone conversation I had with CMC).

But CMC was lying all the times. Do I have the evidence to proof that? Yes, Sir. I have sent the evidence to you. What was it? It was the words, written by CMC’s own solicitor presented in a document filed in a High Court Case (all the detailed info regarding the name, case number were sent to you, Mr Ombudsman). Read the paragraph below:

"In the event of a client's trade with CMC being a successful trade it is CMC who pays the profit to the client and thereby suffers the loss. Conversely, an unsuccessful trade by the client would result in a profit for CMC. ..."

Mr Taylor also refuted my claim that CMC is trading against their client and told me that if I can prove this, he might reconsider his assessment.

So, Mr. Ombudsman, I can understand that you don’t take my word for evidence but how can you refute the evidence produced by the Firm’s own solicitor? Do you think CMC’s solicitor is lying to High Court? Can there possible be better evidence then this, to prove CMC was continuously and deliberately lying to their clients.

Mr Ombudsman, evidence I have provided for my allegation is undisputable, is beyond any doubt. Evidence produced by the CMC’s representative in a written document which was filed in High Court.

If you are disputing this as evidence, I suggest you and adjudicators to find a dictionary and read what the meaning of evidence is. There is nothing wrong with the evidence, problem is your and adjudicators capability to understand the evidence.

I am sorry to say that, but with a manner and method you and adjudicators have used in this case, you can’t even solve a dispute in a “sweet shop”, let alone solving a financial dispute case. ""

If you think that that, even in court, constitutes indisputable evidence then sadly you're just deluded and talking your own book. Suggest you re-read your words, and this time do it from the perspective of a high powered lawyer paid to pick holes in your arguments. Not easy to do when you are firmly on one side of the debate, but you may find it beneficial.

GJ

 

[N Rothschild]

cmc are a bunch of theiving *****, but as with most things in this day and age..what can you do...

 

[arabianights]

I would agree with both assessments above this post

 

[stevespray]

GJ – As ever you are probably correct. It would be foolish to base any case on one piece of ‘indisputable’ evidence but you can build / add to a case using that type of evidence in a very defined manner.

For example, in the case being highlighted here, it appears to a be a claim under breach of contract; the allegation being that CMC acted incorrectly in closing off a clients position(s) without having the authority to do so. Given that CMC’s relationship with its client is ‘execution only’ this would represent a fairly serious allegation. If CMC dealing closed the positions under the assumption that the client had insufficient funds but then later acknowledged that the client did after all have the funds on deposit (as required in the T&Cs) then the firm would fairly clearly be in breach of contract – the plaintiff can demonstrate negligence on the part of the firms staff / operating procedures. Given that a clients deposits are critical to his ability to keep positions open the plaintiff could question the firm over how such a critical error could occur.

The fact that the firm may have acknowledged that a client’s loss is their gain could be used against the firm in my opinion. Not as a centre point of the trial but in a manner which simply points out that the firm may have benefited from the alleged negligence regarding the deposit of funds.

It could potentially be costly for the firm depending on the plaintiffs approach to the claim. Imagine if the markets have move favourably for the client since the firm’s alleged error. If the client can prove that he never agreed to the positions being closed, along with the implication that the firm had no right to close the positions themselves, then the plaintiff could reasonably claim that the contract notes which relate to the closing of the trades are not legally binding on him and thus the positions technically remain open.

Steve.

 

[tradernew]

If you think that that, even in court, constitutes indisputable evidence then sadly you're just deluded and talking your own book. Suggest you re-read your words, and this time do it from the perspective of a high powered lawyer paid to pick holes in your arguments. Not easy to do when you are firmly on one side of the debate, but you may find it beneficial.

GJ

This evidence was taking from " a high powered lawyer paid" by CMC. Courts will only look at the facts and evidence. But there is a policy in FOS to refuse the claims (well most of them) regardless of facts and evidence.

 

[Claudia123]

Its the big guy v the little guy and If I was a gambler (as I am!) know were my $ goes - but good luck.

From what Steve says from experience FOS don't wanna know.

 

[ns1000]

GJ – As ever you are probably correct. It would be foolish to base any case on one piece of ‘indisputable’ evidence but you can build / add to a case using that type of evidence in a very defined manner.

For example, in the case being highlighted here, it appears to a be a claim under breach of contract; the allegation being that CMC acted incorrectly in closing off a clients position(s) without having the authority to do so. Given that CMC’s relationship with its client is ‘execution only’ this would represent a fairly serious allegation. If CMC dealing closed the positions under the assumption that the client had insufficient funds but then later acknowledged that the client did after all have the funds on deposit (as required in the T&Cs) then the firm would fairly clearly be in breach of contract – the plaintiff can demonstrate negligence on the part of the firms staff / operating procedures. Given that a clients deposits are critical to his ability to keep positions open the plaintiff could question the firm over how such a critical error could occur.

The fact that the firm may have acknowledged that a client’s loss is their gain could be used against the firm in my opinion. Not as a centre point of the trial but in a manner which simply points out that the firm may have benefited from the alleged negligence regarding the deposit of funds.

It could potentially be costly for the firm depending on the plaintiffs approach to the claim. Imagine if the markets have move favourably for the client since the firm’s alleged error. If the client can prove that he never agreed to the positions being closed, along with the implication that the firm had no right to close the positions themselves, then the plaintiff could reasonably claim that the contract notes which relate to the closing of the trades are not legally binding on him and thus the positions technically remain open.

Steve.

Whether or not CMC were permitted to close the positions, this does not give him the right to repudiate the position itself. As long as he was informed and in no doubt of the fact that the position was closed, he has a duty to mitigate any further losses if he's going to claim damages. In this case, this means that if he's long and stopped out, but says the stop shouldn't have been filled, he should place a long position at the current level and argue about the difference. He can't claim hypothetical profits having done nothing. Similarly, the action of closing a position on stop does not mean that the initial trade, and therefore the position incurring the loss is invalid.

Totally appreciate this may not sound fair, and obviously I don't have all the facts. This is how CMC will argue it though, and it's a sound and tested defence in the SB world.

 

[stevespray]

Whether or not CMC were permitted to close the positions, this does not give him the right to repudiate the position itself. As long as he was informed and in no doubt of the fact that the position was closed, he has a duty to mitigate any further losses if he's going to claim damages. In this case, this means that if he's long and stopped out, but says the stop shouldn't have been filled, he should place a long position at the current level and argue about the difference. He can't claim hypothetical profits having done nothing. Similarly, the action of closing a position on stop does not mean that the initial trade, and therefore the position incurring the loss is invalid.

Totally appreciate this may not sound fair, and obviously I don't have all the facts. This is how CMC will argue it though, and it's a sound and tested defence in the SB world.

I disagree with you. This is a point of contract law. A completed spread bet is legally made up of two contracts – the opening contract and the closing contract. The critical issue is that each of these contracts represents a contract in its own right and as such can only be formed in a legally recognised manner. In this case a contract can only be formed through an offer + acceptance process. If the plaintiff claims that he never offered or accepted entry into the closing contract then he is within his rights to demand that the firm remove the (closing) contract note from his account – legally the firm will not be able to demonstrate that the contract note is legitimate since there was never an offer from the client to enter the contract. Read the T&C’s carefully and you’ll see my contractual point.

What happened after the firm placed the closing contract on the clients account is largely irrelevant if the firm acted incorrectly. This is why it could be costly for the firm if the market has subsequently moved favourably. Regardless of what the firm may have told the client in terms of having closed the trade that second closing contract would have no legal validity if it was not entered in a valid manner – if the contract remained on the clients account then he could ask that it be removed. If the firm refused then the client could ask the firm to specify its grounds for enforcing the closing contract. If the firm admit that they made a mistake, and that the client did indeed have the required margin in place, then the firm did not have the contractual right to form and subsequently enforce the closing contract note. Where the market went after that point is also irrelevant in terms of the firms potential claim that ‘the client would have been stopped out any way’ as this would not change the fact that the closing contract which the firm are actually enforcing does not legally exist.

As I said, it’s a fairly simple matter of contract law.


Steve.

 

[gle101]

I disagree with you. This is a point of contract law. A completed spread bet is legally made up of two contracts – the opening contract and the closing contract. The critical issue is that each of these contracts represents a contract in its own right and as such can only be formed in a legally recognised manner. In this case a contract can only be formed through an offer + acceptance process. If the plaintiff claims that he never offered or accepted entry into the closing contract then he is within his rights to demand that the firm remove the (closing) contract note from his account – legally the firm will not be able to demonstrate that the contract note is legitimate since there was never an offer from the client to enter the contract. Read the T&C’s carefully and you’ll see my contractual point.

What happened after the firm placed the closing contract on the clients account is largely irrelevant if the firm acted incorrectly. This is why it could be costly for the firm if the market has subsequently moved favourably. Regardless of what the firm may have told the client in terms of having closed the trade that second closing contract would have no legal validity if it was not entered in a valid manner – if the contract remained on the clients account then he could ask that it be removed. If the firm refused then the client could ask the firm to specify its grounds for enforcing the closing contract. If the firm admit that they made a mistake, and that the client did indeed have the required margin in place, then the firm did not have the contractual right to form and subsequently enforce the closing contract note. Where the market went after that point is also irrelevant in terms of the firms potential claim that ‘the client would have been stopped out any way’ as this would not change the fact that the closing contract which the firm are actually enforcing does not legally exist.

As I said, it’s a fairly simple matter of contract law.


Steve.

Nicely written Steve, but I am bound to agree with ns1000. At the very instant they close the position, they would not have inflicted any damage to the client. No one knows in what direction the market is heading (apart from a few insiders). If the position would have gone in the opposite direction, do you think he would have filed a complaint against the company, of course not. Again, this kind of money on the line with a SB is not to be recommended.

 

[stevespray]

Nicely written Steve, but I am bound to agree with ns1000. At the very instant they close the position, they would not have inflicted any damage to the client. No one knows in what direction the market is heading (apart from a few insiders). If the position would have gone in the opposite direction, do you think he would have filed a complaint against the company, of course not. Again, this kind of money on the line with a SB is not to be recommended.

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.

 

[tradernew]

Error occured on 22nd of April and again on 7th of May. On 8th of May Firm accepted it's error, but claimed that liquidation was legal and profit generated for the firm was just. Market went higher in following days until 19th of May, but went down after that. Ombudsman's argument is market went down, so you could have lost the money anyway! Below is taken from my response to FOS.

"Therefore Mr Ombudsman and adjudicators, your statement that when the market went down in the following days and weeks after 19th of May, money would have eroded have no relevance with the disputed trades and merits of the complaint.

Mr Ombudsman, let me tell you few simple facts about the market. May be you and adjudicators learn something. There are two directions in the stock market, one is up, one is down. That is the nature of the market. No one, including myself have control of market move.

What did you and adjudicators expect the market to do after 8th of May? Did you expected the market stay still and wait for the firm to issue their final response? Did you expect the entire stock markets close, so adjudicators and yourself can take the pleasure of time to make a decision about the case? May be, I could have asked LSE, Newyork Stock Exchange, Aussie Stock Exchange, German Stock Exchange, if they could stop the trading until the firm and FOS can decide about my case. I can tell you, not “on the balance of probabilities” but on the balance of facts, their answer would be very polite “**** off”. Why, Mr Ombudsman? Because, the request would be as ridiculous as your and adjudicators argument, that there is no financial loss because days and weeks later market went down. Even the firm does not make such ridiculous statement to defend itself in their final response. Why, Mr Ombudsman? Because, that will be beyond any comprehension and any logic. You can commit a error or crime in financial industry, then wait for the price change , when the price is changed in your favour, you can say fault and crime is not a fault and crime any more."

 

[stevespray]

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.