Trading platforms – Where’s the money?

The withdrawal request

Brian requested a withdrawal of $2,600 USD from his online trading account through his online broker. This was in three withdrawal requests, one of $1,000 USD, another withdrawal of $1,000 USD and a withdrawal of $600 USD. Brian only received $1,000 USD.


When Brian contacted the broker, he was told that the deposits had been made directly to a third party company, and that Brian needed to pursue that company for the $1,600 USD.


Brian’s view was that he had only ever dealt with the broker and not the third party company. Brian said he had received confirmation from the broker that his account had been opened. Brian had also chatted in online chat rooms with the broker, and used a trading platform with the broker’s brand on it.


The contractual relationship between Brian and the broker

FSCL reviewed the documentation it had received about the complaint from Brian. There was some evidence that Brian had deposited funds directly to the third party company’s bank account. There was also some evidence of a relationship between the broker and the third party company, which had soured.


However, FSCL wanted to find out more about the contractual relationship between the broker and Brian. The actual destination of deposits by Brian did not appear to be of relevance. Rather, FSCL was interested to know what the terms and conditions of the contract between Brian and the broker said about the broker’s responsibility to honour withdrawal requests.


Complaint Settled

FSCL opened an investigation of the complaint and asked the broker for information about the contractual relationship. Without FSCL receiving the information or carrying out a full investigation of the complaint, the broker decided to settle the complaint by paying Brian $1,600 USD.