All profits lost when forex account terminated

Gordon joins a trading platform

Gordon set up a forex trading account with Key Forex Limited (“KeyFx”). On 10 September 2014 Gordon deposited $1,000 USD into his KeyFx account. Between 10 September 2014 and 18 September 2014 Gordon made a profit of $5,319.65 USD. This was supported by his KeyFx trading account statement.

Then, Gordon’s KeyFx account was disconnected. KeyFx told Gordon that it had terminated his contract and refunded his $1,000 USD deposit. Gordon was told that his contract was terminated because KeyFx did not accept some of his trading methods.

Gordon complained that KeyFx was not entitled to withhold payment of the $5,319.65 USD profits from him.

 

FSCL’s investigation

We asked KeyFx to confirm, with reference to the contract terms and conditions between KeyFx and Gordon:

a)      KeyFx’s basis for terminating its contract with Gordon, and

b)      its basis for not paying Gordon the $5,319.65 USD.

When considering a complaint FSCL is dependent on the co-operation of both parties to investigate and reach a well-balanced decision. We are also required to investigate complaints efficiently, meaning that timeliness is important. KeyFx did not respond to this complaint in a timely manner. Therefore we had to base our decision solely on information provided by Gordon.

In our view, for KeyFx to take the action it had in relation to Gordon’s trading account, there would have needed to be provisions in the contract giving it these rights. Because KeyFx did not give us a copy of its contract, we could only assume that there was no contract. As a result, we considered that KeyFx had no contractual basis to take the action it did.

We found that Gordon’s complaint should be upheld and that KeyFx should pay him $5,319.65 USD. KeyFx later paid Gordon his trading profits.