FXCM Draws Lawsuit from Retired Teacher over $460k in Cancelled Trades

Was Daniela Shurbanova a front for her banned husband?

FXCM has a new dilemma on its hands, this time from an unlikely source – Daniela Shurbanova, a Bulgarian former teacher, is suing the brokerage over cancelled currency trades dating back to 2013. The firm allegedly cancelled gold and USD transactions costing Ms. Shurbanova upwards of $460,000.

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However, the lawsuit may not be as linear as originally perceived, given a number of oddities and circumstances surrounding the transactions of Ms. Shurbanova. In particular, she had allegedly engaged in what the brokerage described as ‘abusive’ trading strategies, per a Bloomberg report.

The lawsuit, Daniela Shurbanova vs. Forex Capital Markets Ltd., is the latest example of ongoing scrutiny and attention on the foreign exchange (FX) industry, which has gone through an abrupt metamorphosis over the past few years. Shifting regulatory regimes and a crackdown by global authorities demonstrate concerted efforts to iron out any systematic forms of abuse in the industry.


As a further layer of intrigue however, Ms. Shurbanova’s husband also has garnered a controversial pattern history with his own trading. Indeed, court documents show that Mr. Shurbanov has been banned from engaging in contracts-for-difference (CFDs) from FXCM’s UK-based trading platform – the ban was due to suspicion of ‘gaming’ his trades and other alleged forms of abuse.

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On its part, FXCM highlighted Mr. Shurbanov’s past episodes of abuse with the group. Lawyers from the brokerage posited that Ms. Shurbanova – who was still eligible to trade on FXCM’s platform – was simply a front for her husband. Moreover, back in 2013 at the time of the trades, the family shared a total of twenty-seven different trading accounts between themselves.

Ms. Shurbanova claims that she was wrongfully treated after FXCM cancelled a series of trades that totaled nearly $460,000 in profits. These trades entail both currency transactions and gold trades from 2013 following non-farm payroll data in the US. Her legal team has dismissed the aforementioned allegations by FXCM, also reiterating that the brokerage had no right to cancel the trades as it ran counter to fair dealing standards.

‘Manifest’ error

In light of the suit, FXCM has towed a fairly uniform line on the treatment of the transactions, attesting that they were ultimately cancelled on the basis of manifest error. Manifest error represents an occurrence when an element of a given contract is clearly incorrect and cannot possibly be what each party agreed upon. As such, the trades in Ms. Shurbanova instance were placed at a price that was higher than the market was using.

This was accomplished via a fast news feed to facilitate the placement of trades. According to FXCM’s lawyers, this allowed Shurbanova to place trades and close them out at the height of any price discrepancy between the platform’s ‘slow’ retail price feeds and ‘fast’ price feeds, which reflected the prevailing market.

Finance Magnates will update its coverage as the UK trial progresses.

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