The client either. He traded on prices provided by the broker on the broker's platform and that's it. He made some profit and all of the profit he made is his. That's it. And that's the point.
GAIN Capital takes Forex trader to Court for taking advantage of order execution error
- Thread starter TrAndy2022
- Start date
The client either. He traded on prices provided by the broker on the broker's platform and that's it. He made some profit and all of the profit he made is his. That's it. And that's the point.
You might have much sympathy for this trader, and I might have too.
But not accepting that the binding principle here is contract and contract law many other traders will be potentially falsely emboldened to take high risks in pursuit of high profits. Their argument will be just as straightfroward and superficial as yours - that once the trader has made a profit, that profit is his and that's it.
In law that is most definitely not it. A profit made conrtary to contract T&C's or general contractual law, by either party, is potentially forfeit. Even when the money has gone into his accout or even into his bank account or back pocket, it remains for the courts to determine.
This is not an issue of sympathy. This is an issue of contract law. The trader traded on prices provided by the broker on the broker's platform and that's it. He made some profit and all of the profit he made is his. The broker is obligated to honour the trader's profit under the contract via specific performance. Regarding whether it's "high risk" or not or whether it "emboldens other traders to take high risks" are all irrelevant and beyond the scope of this lawsuit. I am not sure why you bring them up. LOL
What part of "the contract" are you even looking at here?
The trader executed trades at the prices that were offered. He didn't hack into a server and cause it to misbehave. He didn't rig their data. He didn't insert SQL queries into his price orders to manipulate a back end server.
They lost a data feed and they continued trading in spite of that. Those trades turned out to be on the wrong side of the market. This is definitely the firms fault.
We're not talking about a server goof giving someone got 100 shares for the price of 10. We're talking about a firm voluntarily taking the opposite side of his order and then deciding two years later that they shouldn't have to pay because they didn't do a good enough job tracking the market.
As far as "the law"... Anybody can sue anyone for anything, and there are plenty of scummy Lawyers and crackpot judges out there. I'm not holding my breath to find out what's right from the courts. What's reasonable here is pretty obvious.
Courts make good and bad decisions vall the time. The way to live is to act with integrity and insist on it from others.
Finally, can the firm show where they've voluntarily paid out money to all the traders who received stale prices that caused the to "erroneously" lose money?
I can't possibly believe that every single trade that happened is this situation went against the firm.
In general, you might be right or you might be wrong. It depends on what the T&C's say. If they say that a trader may not trade so as to take advantage of some error or inaccuracy in the broker's price quotes, then you are wrong. In this specific instance, neither of us knows who is right as we don't have the T&C's.
It is not a universal situation that all traders can always keep all profits they make. It depends on their T&C's and the specific context. Inexperienced traders should not be drawn into thinking that not matter what they do, a profit made is always theirs in every situation.
Even then, probably not as that terminology is ridiculously vague.
What would stop the firm from claiming every trade they lost money on was an error?
Furthermore, is it reasonable to expect a customer to be able to tell the difference between an error and a bad trade on their broker's part? Maybe they have a proprietary model that predicts the price. Who knows?
Is it reasonable to expect a client to keep their profits off to the side for TWO YEARS is case the broker wants to ask for them back?
Finally...
The was a software company that once hid in their t&c that they had the right to camp out in your yard. Do you think that was actually enforceable?
What would stop the broker labelling every profitable trade as an error would be the threat of complaint to the regulator or court action by the trader. That is after all what stops all attempts at fraudulent business.
No, a trader should not be expectd to always know what an error which the broker has made looks like. But again, the broker wouldn't be seeking to prove knowledge. They would have to prove the error which they made, and some level of knowledge might be assumed by the court on the "balance of probabilities", according to what the trader actually did.
We can't know how long a broker could wait before launching an attempt to recover funds which they say have been gained contrary to T&C's. Maybe some countries have a limitation. In others, the trader could argue to the court that a delay of such and such length is unreasonable.
The point I make overall is that profit gained in a trade is not universally and always the sole property of the trader. Keeping that profit is conditional.
We don't have to read their t&c to have a basic idea of what is reasonable. And the existence of any t&c does not automatically override the need for contracts to be generally reasonable to both parties.
T&c are generally weak as far as contracts go away. There's no signed and dated paper printout given to both parties. There's generally no legal representation present for one side, no witnesses and one side usually demands the "right" to change the contract to anything they want at a later date.
There are reasons why when you buy a house, you don't just click a box on a website that says "I agree" in front of no witnesses.
Actually the profit is their property. They might be ordered by a court to turn it over later but that doesn't mean it wasn't theirs in the meantime. Otherwise they would already have it. This guy's not being criminally charged with theft. He's being sued in civil court.
These things are obvious. I think we've reached the end.
This guy is my hero