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Jo C.
Jo C., Barrister
Category: Law
Satisfied Customers: 32086
Experience:  Over 5 years in practice
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To an expert - barrister of legal specialist- on contract

Customer Question

To an expert - barrister of legal specialist- on contract law and criminal financial online fraud on trading platform.
This is a new question.
On 6th April this year a Binary Options online trading platform lost me over $300,000 - all my capital in their account - in one day.
Their trading office was located in London, and I communicated with their chief trader by phone, with emails to summarise our conversations re agreed trading strategy, and she was responsible for trading my account, directly and using her team of traders.
My loss arose due to 3 rogue traders, not following the instruction of the company's chief trader, who was in charge of trading my account, and they were subsequently fired.
There was no discretionary trading agreement offered or signed by me for the company to trade on my behalf, though my emails recorded the trading / risk management rules we agreed over the phone to trade my account. These rules -as evidenced by my emails -were broken.
On 26th May this year, the company agreed through the chief trader to place $100,000 as a bonus capital to my account for the chief trader to trade my account again and hopefully recover my lost money of $300,000+.
However, I subsequently queried why no trading since then had taken place, and was told it was due to Brexit unsettling the markets, and then the company moving its London office to Cyprus in July, where they were hoping to apply for regulation of binary options trading from the CySec regulator, which has always been their plan - i.e. to become regulated - since August 2015, when I joined them.
However, I then received an email from their complaints dept. 3 weeks ago saying there would be no recovery trading by them - I had to do the trading, which I refused, and spoke to my chief trader.
The company gave the reason as having to use compliant protocols in readiness for making their application for regulation.
My chief trader however was able to persuade senior management - given how the company lost my money through their rogue traders - to change their minds, and I received an email today from the company, as copied in below.
The email confirms they will now trade on my behalf - given a signed power of attorney - but only on the basis that I sign a disclaimer, that should the trader lose my capital, I forfeit any right to claim against the company.
Given that the company lost my money in the first place - by breaking written down very clearly summarised rules, as recorded by my emails - I agreed to giving them the opportunity to recover the money through trading - since they NEVER offered to refund the monies, nor even acknowledge what had happened and how they were responsible - other than the chief trader, but only verbally over the phone.
I was worried - and still am - that they were fraudsters, having been defrauded at the same time - see next paragraph.
I say this since binary option companies have a VERY bad reputation and are 99% unregulated. I have already been the victim of fraud for a serious amount of money from these companies, 2 of which I have reported to the police, Action Fraud and the NFIB - all of whom have warned me over the danger of dealing with these companies.
I would like to respond to their email by saying:-
Why they never acknowledge the loss of $300,000 due to their rogue traders which they then fired.
that my agreement to the company to trade a recovery strategy for me was to give them the opportunity to mitigate their liability, since otherwise they should have refunded me $300,000+ loss at the time. Presumably they might have indemnity cover for such contingencies?
by now asking me to sign a disclaimer they are asking me to forfeit my right for compensation due to their fault, and after my acting in good faith by giving them a chance to recover the monies by themselves trading my a/c rather then paying me these monies outright. This would take 6 months to a year - again a sacrifice I was willing to make (given I was fearful of ever getting the money back any other way).
I know it would cost about £15,000+ to take them to court.
Also now that they are in Cyprus are they out of the UK jurisdiction? Their web-site is foreign owned and managed, as this is the way they can still operate in the UK - legally, without being registered with the Gambling Commission - i.e. a loop hole. The FCA currently do not regulate binary options trading.
I believe my strongest practical action to the company would be to threaghten to report them NOW to CySec - the regulator for binary options trading for al the EEC countries - including the UK, which would still require the FCA to grant a passport to the company, given they had CySec approval first.
If I did - could my case TRULY influence CySec to refuse their application for regulation due to MY complaint?
I would be very grateful for your guidance over this.
Mark 18th August 12.20 am
Email received today
Submitted: 1 year ago.
Category: Law
Expert:  F E Smith replied 1 year ago.

How much money did you initially invest?

Where is this company based?

Customer: replied 1 year ago.


Thank you for offering your assistance, and my apologies for the delay in coming back to you.

I have typed a comprehensive reply to you, and rung Just Answer, since I was concerned over confidentiality, and not disclosing the company's details to everyone on the Just Answer web-site.

I was advised therefore to send you my reply via attachment to their support email address, and they will forward this to you.

I hope this is alright with you, and will await your advice.

Thank you.


16.45pm 18th August

Expert:  F E Smith replied 1 year ago.

That’s not a problem. I will post up again when I have the attachment. Best wishes.

Customer: replied 1 year ago.

Hello again

I had not heard from you, so I have been chasing up Just Answer, since they have not been able to locate my email with my attachment, despite sending it twice to***@******.***, and also to [email protected], and today to***@******.***

I am now waiting to hear from Just Answer to confirm you have received it - and will then hopefully hear from you again given this delay.

Thank you.

Mark 21.52pm 22nd August

Expert:  F E Smith replied 1 year ago.

To speed things up, as you have been waiting for some time, please send it to projectsnumberone at gmail com