FXCM owed $225 million by customers who lost on CHF

spinola

Established member
614 138
I'd imagine they must have some six or seven figure lawyers on the leash,and if your staring at quarter billion financial black hole, I'd imagine the instructions to lawyers would be, ' k'in earn it ! '
 

tar

Legendary member
10,443 1,313
Explain please.

Sure

From FXCM's agreement :"you may not be responsible for debit balances directly resulting from trading activity, except in the case of a force majeure as detailed in Section 26.6; "

26.6 Force majeure: Since we do not control signal power, its reception or routing via Internet, configuration of your equipment or reliability of its connections, we shall not be liable for any claims, losses, damages, costs or expenses, including attorney’s fees, caused directly or indirectly, by any breakdown or failure of any transmission or communication system or equipment or computer facility or trading software, whether belonging to us, our Affiliates, you, any market, or any settlement or clearing system when you trade online (via Internet) or for any cause preventing us from performing any or all our obligations, any act of God, war, terrorism, malicious damage, civil commotion, industrial acts, any Exceptional Market Event, or acts and regulations of any governmental or supra national bodies or authorities which in our opinion prevent an orderly market in relation to your Orders (a “Force Majeure Event”). Upon the occurrence of a Force Majeure Event, we shall use commercially reasonable efforts to resume performance and we may give you written notice. Upon occurrence of a Force Majeure Event, all of our obligations under these Terms of Business shall be immediately suspended for the duration of such Force Majeure Event. Additionally, we may take any one or more of the following steps:
(a)
alter normal trading times;
(b)
alter the Margin requirements;
(c)
amend or vary these Terms of Business and any Transaction contemplated by these Terms of Business,
insofar as it is impractical or impossible for us to comply with our obligations;
(d)
close any or all open Transactions, cancel instructions and orders as we deem to be appropriate in the circumstances; and/or
(e)
take or omit to take all such other actions as we deem to be reasonably appropriate in the circumstances having regard to the positions of yours, ours, and other customers.
 

apau

Member
63 4
Wow, they have redefined Force Majeure, well done.

Number one, the company should have had proper risk management and controls in place.

Number two, if these customers take the case to the regulator in terms of understanding the risk in the first place, the company will not have a leg to stand on as it is a common issue in financial markets at present. Whether I agree with it or not, tucking an unusual Force Majeure clause into the terms will not stand up in court and that is even if it gets passed the regulators complaints procedure.
 

BSD

Veteren member
3,819 985
Thankfully in law no one gives a rats ass what some bucket shop creatively writes or doesn't write up in it's contracts.

Instead Courts decide what's what.

And no US based jury court is gonna let FXCM get off with that total BS of their private and ludicrous definition of Force Majeur, also not in view of their previous history of ripping clients off by trading against them etc.

Take em to the laundry and put that sad saga to it's well earned rest already.
 

BSD

Veteren member
3,819 985
Like I said, contracts are effectively meaningless as it's never gonna hold up in court, which is the only place this is gonna be decided.
 

BSD

Veteren member
3,819 985
Nobody cares mate about their marketing lala whose sole purpose was to generate new accounts, and that they are now slimeiley trying to wiggle their way out of.

Someone needs to take em to court and get them sorted and hopefully put to their well deserved rest.

Forward this "Force Majeur" crap to Bloomberg, they are going after them big style at the moment.

No fans of em either.
 

BSD

Veteren member
3,819 985
As I said, it's the court that's gonna decide what's what irrespective of who sues whom, that's not the relevant issue, the court's decision is.
 

spinola

Established member
614 138
Does that mean, they stiffed ' paying winners ' from the swissy move too then, if they are stating ALL their obligations in terms of business are cancelled etc ?

...all of our obligations under these Terms of Business shall be immediately suspended for the duration of such Force Majeure Event


So no obligation to pay positive balances arising out of the event ? Who has made a tonne from fxcm being long the swissy , are you getting it ? Got it ?
 

Fugazsy

Veteren member
3,661 677
those broker are mostly scam bags, we need to keep an eye on them all the time, I have spent the last 2 days dealing with them to make sure I do not get trapped in the future, no one will guarantee to cover for incidents like the one happened the other day, only one said but I have not read the small print....but I am not interested because they do not have an office down here.

For what I understand the only way is to not to have a leverage not more than 1:50, I spoke to what seem a decent broker today and they told me that they have not suffered much on the incident because they keep the leverage very low, especially on the swiss.

Some cowboys were offering high leverage to make more money when clients were losing and now they went burst, to be honest I do not feel very sorry for them....but that is just me
 

tar

Legendary member
10,443 1,313
Does that mean, they stiffed ' paying winners ' from the swissy move too then, if they are stating ALL their obligations in terms of business are cancelled etc ?

...all of our obligations under these Terms of Business shall be immediately suspended for the duration of such Force Majeure Event


So no obligation to pay positive balances arising out of the event ? Who has made a tonne from fxcm being long the swissy , are you getting it ? Got it ?

Didn't hear anything in that area yet , just that they are asking clients to cover their negative balances ...
 

Fugazsy

Veteren member
3,661 677
one other thing I do not understand with those brokers is this: we pay them and they need to supply us liquidity, but when liquidity is not there, they do not take responsibility.....but that is what we are paying them for, aren't we?
 

apau

Member
63 4
one other thing I do not understand with those brokers is this: we pay them and they need to supply us liquidity, but when liquidity is not there, they do not take responsibility.....but that is what we are paying them for, aren't we?

I have to say I agree totally with your views, the ridiculous leverage has caused this issue and they are now trying to wriggle out of the loss that they had no processes in place to control.

Once again, no court or regulator will side with this company as I am sure most of the clients didn't even know this could happen.

Simple suitability! Expect the FCA to weigh in on these kinds of firms in the near future.
 
  • Like
Reactions: Fugazsy
 
AdBlock Detected

We get it, advertisements are annoying!

But it's thanks to our sponsors that access to Trade2Win remains free for all. By viewing our ads you help us pay our bills, so please support the site and disable your AdBlocker.

I've Disabled AdBlock