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tdlawyer
tdlawyer, Lawyer
Category: Law
Satisfied Customers: 1096
Experience:  11 years experience of general practice.
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Hi td lawyer, are they in a position to offer a lower leverage

Customer Question

Hi td lawyer, are they in a position to offer a lower leverage than the minimum's that's advertised?
Submitted: 3 years ago.
Category: Law
Expert:  tdlawyer replied 3 years ago.

tdlawyer :

Yes, they can do that. This is their choice, the minimum is their stipulation and they are legally free to depart from it. It might be for their best customers they might readily do this, but they under no obligation to stick to an advertised minimum.

Customer:

ok

Customer:

but if the leverage change is to target maliciously to close out on the positions

Customer:

how does that owrk

Customer:

work

tdlawyer :

hang on ... I've just found a case which might be useful ... wait there a sec.

Customer:

cheers

tdlawyer :

I was looking at a case, which isn't really on the point we're discussing, but it does show how seemingly easy it is to manipulate prices. I suppose every broker/trader etc. has different abilities on different systems, but you might find this case an interesting read anyway: http://www.bailii.org/ew/cases/EWHC/QB/2013/478.html

tdlawyer :

To answer your question, if the change is done deliberately to manipulate positions (as appears to have happened in this case I just gave you), then this is going to be fraud if it's not permitted or consented to - which I seriously doubt!!!

Customer:

    1. Details of the judgments and settlements available to the court at the time of the trial included the following. Judgment in default of a fully particularised defence in the sum of £197,317 and interest was obtained against Tom Benn. Judgment in default of a fully particularised defence was obtained against the 8th Defendant ("Mr Goldstein") in the sum of £112,348 plus interest. Judgment was obtained against the Fifth Defendant ("Mr Cowan") in the sum of £22,263, against Mrs Teller in the sum of £20,204 plus costs and against Ms Teller in the sum of £56,151 plus costs. The action against the Fourth Defendant ("Ms Cooper") was stayed on terms that she agreed to pay IG Index £1500.


 

Customer:

lol 20 k

Customer:

what happened with this

Customer:

lol

tdlawyer :

:) God knows!

tdlawyer :

Interesting?

Customer:

an actual case against a broker

Customer:

interesting

tdlawyer :

there are a few actually ...

Customer:

anymore lol?

tdlawyer :

Hang on ....

tdlawyer :

The cases are really useful, because they give you the background on the regulatory framework and the arguments people like yourselves have tried to run in the past. So, some interesting cases:

tdlawyer :

http://www.bailii.org/ew/cases/EWHC/QB/2011/138.html

tdlawyer :

http://www.bailii.org/ew/cases/EWHC/Ch/2008/1136.html

Customer:

interesting

Customer:

but back to the question

Customer:

if the leverage is aimed to close the positions

tdlawyer :

Oh yea.... sorry.

Customer:

how does that fair then

Customer:

no thanks for these

tdlawyer :

The botXXXXX XXXXXne has to be this: if customers are targeted with a dishonest intention, in breach of the agreement, to force them to lose money, that has to be unlawful and possibly criminal. Irrespective of the "fiddle" if there is one - and how it happens - the fact of the fiddle is enough to be criminal, and cause the broker to be unable to sue on what it says is due. If anything, the right to sue will be the other way around!

Customer:

sorry what does the fiddle mean

tdlawyer :

Sorry, I'm just saying - that if they're trying to close you out to make money, and they do so unlawfully, that's a manipulation of the figures (which should really be reflecting real-time market conditions), and must be unlawful.

Customer:

what about close me out to minimise their risk

Customer:

but i am willing to uphold my risk

tdlawyer :

Why do they say they did it?

tdlawyer :

Basically, do their T&Cs allow them to do it?

tdlawyer :

It always depends on their agreement. In fact, if you look at the second case I sent you of the second lot, it's a similar thing to what you're asking here. If certain margin requirements are not met, for example, they can close out and protect themselves.

Customer:

No it doesnt

Customer:

they said they are execution only.

Customer:

it's not margin requirements

Customer:

existing trades were opened at 1:200

Customer:

they were like

Customer:

hey we will reduce you to 1:50 cause it's risky

Customer:

which is just complete garbage

tdlawyer :

okay - you've read more than me of that one ... I skim read much more quickly :)

Customer:
Requirement for risk warnings

5.4.3R

A firm must not:

(1) make a personal recommendation of a transaction; or

(2) act as a discretionary investment manager; or

(3) arrange (bring about) or execute a deal in a warrant or derivative; or

(4) engage in stock lending activity;

with, to or for a private customer unless it has taken reasonable steps to ensure that the private customer understands the nature of the risks involved."

 

Customer:

lol

tdlawyer :

http://www.bailii.org/ew/cases/EWHC/Ch/2011/2562.html

tdlawyer :

This one was margin requirements ....

tdlawyer :

The botXXXXX XXXXXne though - it depends what their terms allow to happen.

tdlawyer :

But fraud unravels everything, so the saying goes, so if there is an intention to do something unlawful which is done to cause you loss or them to make money - that gives you a good starting point to argue that you've had a fraud committed against you.

Customer:

very interesting

Customer:

if fraud was found

Customer:

do i get compensated

Customer:

let's say

tdlawyer :

If you suffered due to it ... then yes, you should do.

Customer:

In stuff like

Customer:

    1. In all the circumstances I give judgment on the claim and dismiss the counterclaim.


 


 


 

Customer:

does it mean the claimant won?

tdlawyer :

Yes, it does.

Customer:

if the claimant won

Customer:

and they claim for 300k

Customer:

means the claimant gets all 300 k?

tdlawyer :

Yes.

tdlawyer :

Because the counterclaim as dismissed, so nothing to offset the claim.

Customer:

wow i thought they usually go to a very um

Customer:

unfavourable scale for the claimant

tdlawyer :

right .... the wife is shouting me to go eat tea .... can carry on with you in a bit or have you had enough of me? :)

Customer:

ha

Customer:

how old are you btw

Customer:

i assume out of law school recently?

Customer:

haha

Customer:

cause you use the word "lol"

tdlawyer :

Not quite .... 36! So not many grey hairs, although it's going that way!!

Customer:

haha!

Customer:

btw my friend says thanks a lot for everything

Customer:

he got his subscription lifted hahaha

tdlawyer :

anytime - to you both :)

tdlawyer :

Got it lifted?

Customer:

so he wasn't able to chat with you

Customer:

yeah

tdlawyer :

You mean he cancelled?

Customer:

apparently asking too many law questions

Customer:

yes

tdlawyer :

He cancelled, or they cancelled him?

Customer:

they cancelled him

tdlawyer :

Bummer, wondered why he'd gone quiet!

tdlawyer :

That is a shame ... I liked our chats!

tdlawyer :

Have to do it via you :)

tdlawyer :

Tell him good luck!

Customer:

sure

Customer:

yeah no problem he could come on

Customer:

haha

Customer:

see you and have fun

Customer:

please lock this

tdlawyer :

You too dude. Adios.

Customer:

adios

tdlawyer, Lawyer
Category: Law
Satisfied Customers: 1096
Experience: 11 years experience of general practice.
tdlawyer and other Law Specialists are ready to help you
Customer: replied 2 years ago.

Hey dude,


 


can you pick this up?


 


http://www.justanswer.co.uk/law/85env-hi-tdlawyer-question-talk-when.html

Expert:  tdlawyer replied 2 years ago.

If you want to chat, you'll need to post a new question for me now, as this is Q&A and I can't change it back.

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