Retired teacher who dabbled, or something else?
No one is sympathetic to brokers but this is a tough case.
FXCM canceled a series of transactions that made a retired Bulgarian teacher who dabbled in forex a profit of $460,000. Terrible, right?
Well it might not be all it seems.
The company had earlier banned her husband from trading CFDs because they suspected him of gaming the platform. The husband-and-wife team also had a total of 27 accounts with the brokerage.
According to FXCM, the trades were revoked because of a "manifest error" that meant the trades were placed at prices higher than the market. They called it an abusive trading strategy.
It appears as though they traded around news events when FXCM said they abused price latency.
So we don't know all the facts but this isn't just a case of a forex broker screwing a teacher who dabbled in FX and made some money. That said, if they were able to exploit some kind of weakness in the platform, that's tough luck for the broker. You certainly don't see brokers refunding traders when their platform shortchanged clients.
The case is scheduled for trial in the UK. Bloomberg originally reported the story.
