A judge in the UK high court dismissed a breach-of-contract suit against both Ikon Finance and Hantec Markets where a heavyweight retail client was seeking $53.0 million in damages over the allegedly misappropriated funds.
Ikon Finance exited the retail forex market in 2017 following regulatory restrictions by the UK Finance Conduct Authority (FCA). At the time, Hantec acquired the retail client base of IKON Finance after the regulator said that the rival broker has inappropriate human and operational resources in place.
Following this, a Jordanian resident named Hafez Fakhri Taji Al Farouqi accused IKON Finance of moving his account to Hantec without his consent, seeking nearly $11.6 million in misappropriated funds and damages. He also filed a lawsuit against Hantec for $42 million in civil damages, alleging the migration of his account took place without prior authorization.
Al Farouqi also claimed that both brokers secretly deducted unauthorized commission and introducer fees from his account. Another argument was that Hantec Markets closed his account without sending cancellation terms, giving reasonable notice, or enough time to make alternative arrangements.
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The litigation began in December 2019, but after a six-month investigation, a judge acquitted both brokers, saying it was “fanciful” to believe they had faked trades that caused Al Farouqi to incur substantial losses. The case was entirely tossed out because the evidence was too weak to support a conviction that IKON and Hantec conned the Jordanian investor or breached regulations when they closed out.
Hantec Markets responds
Back in October, Hantec Markets has strongly refuted all claims of Hafez, and the FCA-regulated broker is fighting back against each allegation. Specifically, the company said it’s neither obliged to continue their relationship or to explain for what reasons it closed any client’s account. It also denied that the retail trader had suffered any loss or damage as a result of its decisions and that it gave him a “reasonable” nine days’ notice before the closure of his account.
After doing a background check, Hantec added in its defense that it did not charge any commission from Al Farouqi’s accounts. The UK-based FX trading brand also tried to dismiss the suit on the grounds that the investor agreed to move his trading account after he ticked a dialogue box to accept Hantec’s terms and conditions.
Al Farouqi reiterated in its December that the broker didn’t follow good practices as a nine-day notice period did not give him an opportunity to respond if they misunderstood the facts of his situation.
As widely known, IKON Finance managed to avoid several lawsuits against its operations around the world, including those suing its NFA-licensed subsidiary in the US, IKON Global Markets.