UK Broker Yet to Pay, Despite Ombudsman Ruling

FortuneZ learned on Tuesday that retail broker ThinkMarkets has yet to pay back a former client, despite being ordered to do so by the UK’s Financial Ombudsman.

Back in July, the ombudsman issued a final decision in favor of the trader. The case relates to a series of trades made by the former ThinkMarkets client in mid-2018.

According to the financial authority, the trader managed to make a number of profitable trades in that period.

ThinkMarkets argued that the trades might have been undertaken using a trading system that took advantage of latency issues within the broker’s MetaTrader 4 platform.

As the London-based firm has a clause in its terms and conditions restricting the use of such a system, it withheld the client’s profits – something that it is allowed to do.

“ThinkMarkets is a responsible, fair and trader-centric provider that treats its customers fairly and has embedded those principles across its global product offering,” said a spokesperson for the broker.

“However, the broker was the victim of a number of rogue and malicious traders that exploited and abused the firm’s services through sophisticated and refined predatory practises such as latency arbitrage. The wrongdoing was swiftly identified and the firm exercised its contractual rights as per the Client Agreement.”

Certainty required

In its response, the Financial Ombudsman said that, though ThinkMarkets is allowed to withhold profits made by taking advantage of latency issues, the broker has to be certain that a client used such a system to make money.

“[ThinkMarkets’ terms and conditions refer] to the revocation of transactions ‘that’ rely on price latency arbitrage – not transactions that ‘may have’ or ‘possibly’ relied on price latency or arbitrage,” said ombudsman Roy Kuku in his decision.

Kuku’s ruling was accepted by the client, making it legally binding. But FortuneZ understands that the broker has still not paid out – even though a one-month deadline for doing so has since passed.

Speaking to FortuneZ, a spokesperson for the Financial Ombudsman said that the broker is legally required to pay the trader.

“A Final Decision is just that – a final decision,” said the spokesperson. “If the person that came to us accepts the ruling within the set time period, then all parties are legally required to adhere to that decision.”

But according to the ThinkMarkets spokesperson, the case may not be over. The broker is reviewing the ombudsman’s decision and may seek a judicial review to prevent it from having to pay out.

“The case referred to is currently being assessed by our legal counsel and if there are instances of procedural impropriety, errors in English law or statutes, irrationality or abuse of power by a public body, then necessary action may be taken under the Civil Procedures Rules for judicial review,” said the spokesperson.

bitcoin
Bitcoin (BTC) $ 10,885.18 1.04%
ethereum
Ethereum (ETH) $ 358.08 0.14%
tether
Tether (USDT) $ 1.00 0.32%
ripple
XRP (XRP) $ 0.244136 0.46%
bitcoin-cash
Bitcoin Cash (BCH) $ 230.22 3.52%
chainlink
Chainlink (LINK) $ 10.96 4.93%
polkadot
Polkadot (DOT) $ 4.32 0.78%
binancecoin
Binance Coin (BNB) $ 26.27 1.64%
cardano
Cardano (ADA) $ 0.103251 7.79%
bitcoin-cash-sv
Bitcoin SV (BSV) $ 170.38 3.47%
S&P 500  ^GSPC 
$3,298.46  $51.87  (1.60%)
Dow Jones Industrial Average  ^DJI 
$27,173.96  $358.56  (1.34%)
NASDAQ Composite  ^IXIC 
$10,913.56  $241.26  (2.26%)
Russell 2000  ^RUT 
$1,474.91  $23.09  (1.59%)
Crude Oil Nov 20  F*CL.NYM 
$40.02  $0.2300  (-0.57%)
   
$0.0000  $0.0000  (0.00%)