Brokers chasing you for negative account balance
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Thread: Brokers chasing you for negative account balance

  1. #1
    Please post here if your broker is chasing you for money to repay a negative account balance after the EURCHF debacle,
    whether you are likely to cover and what action is taken in case you haven't paid.

    I wasn't involved luckily but I contacted my broker LMAX (who I've always proven to be amazing and also the best broker I've used up until now)
    to discover what could happen in such a scenario. They simply stated I would face legal action in case such a debt wasn't paid.
    That's kind of scary! Makes me consider whether I ought to be using them.
    I also wonder how this could be possible even though they simply match buyers with sellers presumably the people that are owed money
    will be owed by thousands of others that would make legal actions against them hopeless.

  2. #2
    Quote Originally Posted by ;
    Please note here if your broker is chasing you for money to repay a negative account balance after the EURCHF debacle, whether you will cover and what action is required if you haven't paid. I was not involved luckily but I contacted my broker LMAX (who I've always found to be brilliant and the ideal broker I've used up until now) to find out what would happen in a situation like this. They stated that I would face legal action if such a debt was not paid. That is sort of scary! Makes me think about whether I should be using them in future....
    Even though they all do is simply order matching matching buyers with sellers BUT they did give you the excess money for you to trade via the leverage rate just enjoy a loan and when your trade is closed, you repay that extra money that you borrowed together with your account balance and your profit/loss. If your account balance is negative that means you don't have enough to pay for exactly what the broker has lent you you've defaulted on that loan just like you defaulted on your mortgage or your auto loan. Since your account balance is not collateralized like your mortgage, your broker doesn't have anything to repossess from you to allow them to sell to recoup some loan amount, so like recovering from any unsecuritized loan, the only recourse they have is 1) sending one to collection agency, 2) taking you to court or 3) hiring some professionals to appear in your door with a few large sticks. Scary really thinking you can all be on the hook for thousands of dollars in just 1 hour.

    I'm disappointed and amazed to understand that LMAX chooses to go after the adverse balances. Many brokers opted to forgive negative balances rather than needing them to be repaid. If those LP's REALLY have an ounce of conscience, they'd opt to forgive those negative balances from their customers, both the brokers and in turn the brokers can forgive the adverse accounts from us traders because they were the ones who caused these large negative accounts by artificially stopping liquidity thus single-handedly causing the huge 1.8K pips drop. If they had remained on the market and continued to provide liquidity, there would be negative balances but the carnage wouldn't be this large. That is almost like price-fixing so they really shouldn't stand to benefit from this ill-gotten gains but of course all of them are made from s***, so they will chase after the brokers until they are pushed to bankruptcy and so destroying the whole entire retail FX business and then FX trading will return to their exclusive Big Boys Club. And we are return to mutual funds.

  3. #3
    Quote Originally Posted by ;
    quote I am frued and amazed to learn that LMAX chooses to proceed after the negative balances.
    Have you got a source for this I was considering starting an account with them? Not so sure now.

  4. #4
    Quote Originally Posted by ;
    quote have you got a source for this I had been thinking of starting an account with them? Not so sure now.
    Quote Originally Posted by ;
    I was not involved luckily but I contacted my broker LMAX (who I've always found to be brilliant and also the ideal broker I've used up until now) to learn what would happen in a situation like this. They stated that I would face legal action in case a debt was not paid. Which is kind of scary! Makes me consider whether I should be using them in future. I also wonder how this would be possible - even though they just match buyers with sellers presumably the people that are owed money will be owed by thousands of other people that would make...
    My origin. And honestly I'd like to think LMAX is pretty great also but after searching around, there are choice brokers with price.

  5. #5
    Quote Originally Posted by ;
    I also wonder how this would be possible even though they simply match buyers with sellers the people who are owed money are going to be owed by tens of thousands of others that would make legal actions against them hopeless.
    And btw it wouldn't be hard for them to pursue legal action against all the traders. They will just go after the traders you by one like how the US persecuted people for piracy breach. Brokers like LMAX already have attorneys in order that they might as well use them.

  6. #6
    Any reason in particular LMAX should pay for losses that are YOUR?

  7. #7
    Quote Originally Posted by ;
    Any reason in particular LMAX should pay for YOUR losses?
    Of course not.... But if you had the option between a broker who does not force you to cover if you account goes negative or does what will you select?

  8. #8
    They stated I would face legal action if a debt was not paid.
    Now I am wondering how this act could be carried out ?
    For said customers are overseas nation, did they capable breach some nation regulation?
    I dont even have any appropriate knowledge with regulation law, or even of it. No matter what I see this not appropriate to take care of inevetible event.
    Everyone seem mourn from having a huge reduction, and they always got my deepest compassion.
    I dont trade together fortunely, but for getting such legal actions, I would think more special manner at such act. Did they gont sort a debt collector group, and knocking at my front door as revealed my equilibrium trading statement ?

  9. #9
    Having to cover a balance only seems common sense, there is far more important criteria in selecting brokers. . .making customers pay unwanted balances is only business, they are not charities...

  10. #10
    Quote Originally Posted by ;
    They just said that I would face legal action if such a debt wasn't paid. I'm wondering how this action could be carried out ? For said customers are country? I dont even have any appropriate knowledge with regulation law, or much of it. Regardless of what I see that this event that is not appropriate to handle inevetible. From using a huge reduction everybody seem mourn, and they got my deepest sympathy. I dont trade fortunely, but I would think more specific manner at such action, for having such action. Did they...
    Depends on the nation, debt in the UK is a civil matter not criminal. And yes folks knock on your door and seize goods. They're also able to indie your name in the courts which makes it tough to get credit in future.

    Each nation will be different.

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