In a judgment earlier this month, the CFTC decided in favor of an appeal from Gain Capital in the case of Robert West vs Gain Capital. The appeal rejected an earlier decision that Gain was responsible to pay West reparations in regards to ‘recklessly fail(ing) to disclose material facts to its customer’.
The case revolves West’s trading activity in 2010. At the time, West had opened deposited $5000 in his Forex.com account with his credit card and had engaged in two speculative positions with the EURUSD. The trades were opened via telephone calls with Forex.com dealers. West suffered liquidation of his account after failing to meet minimal margin requirements.
Following the losses, West complained to Gain Capital that had failed to inform him of the risks and that the broker closed his positions without his knowledge, and was answered that he had used too much Leverage when he was trading. West then contacted the credit card company which reversed the $5000 deposit. He then filed a complaint with the CFTC against Gain Capital and sought a refund of $5000, plus $20,000 in potential profits that he had lost due to his account being liquidated. After judging on the case, Gain Capital was found to be at fault for omitting to West the risks involved with positions and he was awarded the full $20,000 in reparations.
Appealing the case, Gain Capital brought the judgment to the CFTC which disagreed with the ruling and concluded
“We reverse the Judgment Officer's award of speculative profits. We hold that the evidence in the record does not support a conclusion that Gain Capital violated section 4b of the Commodity Exchange Act. We further hold that, even if Gain Capital had violated section 4b in connection with West's purchase of the second contract, West was at most entitled to an award of his out-of-pocket losses. Since Gain Capital voluntarily refunded that amount to him, there is no additional remedy that we can award. Accordingly, we reverse the Initial Decision and dismiss this matter with prejudice.”
The CFTC based their decision on three reasons:
1)The initial ruling was based on ‘Fraud by Omission’. The CFTC didn’t believe that Gain had acted recklessly and omitted information that led to West being misled, as he had provided information that related to his understanding of the market.
2)The CFTC rejected West’s claim that Gain was supposed to contact him and inform him of the margin call as well as that the broker was not allowed to close his positions without his permission. The CFTC stated that Gain had no obligation to provide a margin call as well as that they had permission to liquidate his account.
3)The CFTC also added that West incurred no ‘out of pocket’ expenses and was even refunded his initial $5000 deposit. Therefore, even if the CFTC accepted that Gain had committed fraud, West wouldn’t merit to receive reparations.
In a judgment earlier this month, the CFTC decided in favor of an appeal from Gain Capital in the case of Robert West vs Gain Capital. The appeal rejected an earlier decision that Gain was responsible to pay West reparations in regards to ‘recklessly fail(ing) to disclose material facts to its customer’.
The case revolves West’s trading activity in 2010. At the time, West had opened deposited $5000 in his Forex.com account with his credit card and had engaged in two speculative positions with the EURUSD. The trades were opened via telephone calls with Forex.com dealers. West suffered liquidation of his account after failing to meet minimal margin requirements.
Following the losses, West complained to Gain Capital that had failed to inform him of the risks and that the broker closed his positions without his knowledge, and was answered that he had used too much Leverage when he was trading. West then contacted the credit card company which reversed the $5000 deposit. He then filed a complaint with the CFTC against Gain Capital and sought a refund of $5000, plus $20,000 in potential profits that he had lost due to his account being liquidated. After judging on the case, Gain Capital was found to be at fault for omitting to West the risks involved with positions and he was awarded the full $20,000 in reparations.
Appealing the case, Gain Capital brought the judgment to the CFTC which disagreed with the ruling and concluded
“We reverse the Judgment Officer's award of speculative profits. We hold that the evidence in the record does not support a conclusion that Gain Capital violated section 4b of the Commodity Exchange Act. We further hold that, even if Gain Capital had violated section 4b in connection with West's purchase of the second contract, West was at most entitled to an award of his out-of-pocket losses. Since Gain Capital voluntarily refunded that amount to him, there is no additional remedy that we can award. Accordingly, we reverse the Initial Decision and dismiss this matter with prejudice.”
The CFTC based their decision on three reasons:
1)The initial ruling was based on ‘Fraud by Omission’. The CFTC didn’t believe that Gain had acted recklessly and omitted information that led to West being misled, as he had provided information that related to his understanding of the market.
2)The CFTC rejected West’s claim that Gain was supposed to contact him and inform him of the margin call as well as that the broker was not allowed to close his positions without his permission. The CFTC stated that Gain had no obligation to provide a margin call as well as that they had permission to liquidate his account.
3)The CFTC also added that West incurred no ‘out of pocket’ expenses and was even refunded his initial $5000 deposit. Therefore, even if the CFTC accepted that Gain had committed fraud, West wouldn’t merit to receive reparations.
Cheetah Fund Investors Lose $9 Million in Alleged Fraudulent Scheme
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
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#fmas #fmas24 #fmevents #networking #finance #africa
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Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
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#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
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#fmas #fmas24 #fmevents #networking #finance #africa
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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