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Author Topic: Is it legal that a broker decides to hold all your money for up to 6 months?  (Read 11508 times)

Offline drunkfx

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Me and few other traders are in a very unconvenient situation with GDMFX. They claim that based on their ToS, they have right to hold our funds (profits and even the withdrawals) for up to 6 months, because our positions exceeds 1000 pips move during 48 hours and they call this "extreme volatility". With this excuse, they hold our funds since end of October (3 months already) and they are not able to explain why they dont return at least our deposits. We traded USDTRY and there a move of 1k pips during 48 hours is nothing unusual, while just opening spread was about 60 pips. Basicaly their message to traders is "Open a trade and pray that it will not move a lot in your favor, because then we can (and very likely we will) hold your money for up to 6 months and you will not be able to do anything during this period".

Do you think guys this is legal? At least it is pretty unethical by my opinion.

Here is the condition Im talking about from their ToS:

Service Interruptions due to Extreme Market Conditions
Under certain extreme market conditions, it is possible for the price of a trading instrument offered by GDMFX to change drastically within a short timeframe, leading to significant profits or losses for all customers who are engaged in trading with the said instrument or its derivatives. In order to guarantee the stability of its systems and liquidity, GDMFX shall reserve the right in all cases when the price of a trading instrument changes by 1000 pips or more, within 48 hours, to temporarily suspend, or delay certain Services to some or all of the customers whose accounts or trading positions have been affected. Such interruptions might be applied to some or all of the following services: deposit processing, withdrawal processing, internal transfer processing, or order processing for any period deemed necessary by the company, but not longer than 6 months from the date of the market event.

Simply they have to pay your profit from their pocket, because their dumb risk management guy forgot to turn off lira trading during high volatility, lol.

Or they simply failed to clear your orders with their counterparty (LP), because they turned off lira trading, while GDMFX guys already painted nice $$$ in your platform.

Finding guilty basically takes up to 6 months according their ToS and if you see a provision about cancelling profits from off-market trades, then they are likely to execute this option to cancel your profit.

The money you had before trade should not be affected I guess.

Online Nasdaq100

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@Drunkfx, how do I know if my broker has the the provision to cancel profits?

Is that something that they would mention somewhere in their website/business license , etc?

Offline Eliza Abrams

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A transparent broker should absolutely have stated it on their website, but a lot of brokers, even regulated ones, aren't that transparent.

Offline reinerh

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A transparent broker should absolutely have stated it on their website, but a lot of brokers, even regulated ones, aren't that transparent.

there is a lot of scam brokers out there, one must do big time research before sending away any money.

like most all binary ones are scam. plus alpari went bust, and they were quite reputable. so one needs to keep that in mind as well.

Offline iMusingKiMi

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A transparent broker should absolutely have stated it on their website, but a lot of brokers, even regulated ones, aren't that transparent.

there is a lot of scam brokers out there, one must do big time research before sending away any money.

like most all binary ones are scam. plus alpari went bust, and they were quite reputable. so one needs to keep that in mind as well.

I still remember when you mentioned Alpari. Although they go bust, I still get my money back but it took quite couple of months.

Offline reinerh

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A transparent broker should absolutely have stated it on their website, but a lot of brokers, even regulated ones, aren't that transparent.

there is a lot of scam brokers out there, one must do big time research before sending away any money.

like most all binary ones are scam. plus alpari went bust, and they were quite reputable. so one needs to keep that in mind as well.

I still remember when you mentioned Alpari. Although they go bust, I still get my money back but it took quite couple of months.

good regulation is certainly worth something :)


Offline Eliza Abrams

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True. Scams are a huge part of this sector, unfortunately. They are ubiquitous. For example, the UK has what is considered to be one of the most trustworthy regulators in the world, but even with their presence UK citizens have lost 197 million pounds to scams (mostly Forex scams) for 2018 alone.

Can you imagine what is happening in countries without such regulation?


Offline iMusingKiMi

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A transparent broker should absolutely have stated it on their website, but a lot of brokers, even regulated ones, aren't that transparent.

there is a lot of scam brokers out there, one must do big time research before sending away any money.

like most all binary ones are scam. plus alpari went bust, and they were quite reputable. so one needs to keep that in mind as well.

I still remember when you mentioned Alpari. Although they go bust, I still get my money back but it took quite couple of months.

good regulation is certainly worth something :)

Straight to the point. But it wasn't a huge account. Not sure if they pay those with huge amount of balance.

Offline Eliza Abrams

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Regulatory compensatory schemes have a limit, so people with accounts above that limit likely couldn't be compensated fully.

Offline Loperte

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This is a very common and alarming situation. There are a lot of brokers that are doing this. I don't know whether this is legal or not. I think that you should contact the right representative to solve this issue. This shouldn't occur. This will discourage the traders to trade.

Offline Eliza Abrams

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Regarding the original post, did you ever get your money back?

Offline drunkfx

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@Drunkfx, how do I know if my broker has the the provision to cancel profits?

Is that something that they would mention somewhere in their website/business license , etc?

read your client agreement especially the section which concerns account termination, conditions of cancelling profit, off-market trades, etc. Every broker described such cases in their ToS

Offline grobanjosh

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Heard the same story from one guy that had 10k on the account. Hope everything will be fine and you will get your money!
Would like to hear If something changed

Offline Eliza Abrams

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Me too, an update on the situation would be great if the original poster would be willing to give it.

 

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