Legal Actions in relation to Forex
Article by Chambersfield Economides Kranos
The Forex industry is a legitimate trading market where the world’s currencies are traded.
Indeed, the said industry became a trend the past few years due to the number of benefits that are provided, since without it, it would be difficult to trade the currencies needed for various purposes.
However, in the recent years and since the industry grows rapidly, a large number of scams evolved with it.
Therefore, there is the Cyprus financial regulator, i.e. Cyprus Securities and Exchange Commission (CySEC), to supervise the financial market of Cyprus and regulate the Forex brokers located within the Cyprus jurisdiction.
Among others, one of the most common fraudulent practices that prevailed within the market, through the years, is the manipulation by brokers. This means that for a trader, who totally depends on the broker’s price feed, this would look as price tampering done by big players, such as banks, in the Forex market.
This kind of manipulation is often demonstrated in the currency market and it is quite easy for a retail broker to alter the price feed provided to clients.
To this point, it shall be noted that it is being argued that even regulated brokers are not exempted from doing frauds and/or tend to bypass the regulations, in some extent. Thus, it is advisable for one involved in the Forex industry to be aware of all the relevant and necessary information on how to proceed with filing a complaint against a CySEC regulated Forex broker and/or proceed with the submission of a legal action against the Forex broker to retrieve his/her financial loss and/or damages.
It is always preferable if you could settle any dispute arising, in an out of Court procedure. For that reason, one might be able to file a complaint with the Cyprus Investment Firm (CIF) – which is basically his broker.
During this procedure, one must, most importantly, remember to mention all and each one of the relevant personal details and the reasoning of the complaint as well as the financial product that he/she invested in, so that the broker will not have the opportunity to flee.
To this point, it should be noted that the broker will be required to acknowledge receipt of the compliant in writing within 5 days, and needs to reply in written within 60 days, informing the claimant whether the complaint has been resolved or not. Extension of this time frame may be requested by the broker, though relevant explanations must be given.
In case, the broker’s response is not the expected or they reject the aforementioned complaint conducted, the second relevant step is to file a complaint to the Financial Ombudsman.
Specifically, the Financial Ombudsman is responsible for settling disputes between brokers and their clients. It is noteworthy that one shall not be able to proceed with contacting the Ombudsman after the expiry of the time period of 4 months upon the receival of the decision from the broker.
Further, taking civil legal action or requesting the service of a fund recovery firm, is the most imminent resort that a fraud victim/investor can consider in order to retrieve his/her financial loss.
In such cases, a civil legal action can be submitted before the District Court, based on market abuse, fraudulent misrepresentations, market manipulation or even breach of contract, always upon the specific circumstances of each case and/or dispute.
Having said the above and since the needs of an investor may vary upon the nature of the dispute occurred based on the specific circumstances of each case, we invite you to discuss with Chambersfield Economides Kranos team further your matter on a case by case basis and in case of further assistance needed, we will guide you through the steps necessary to start the process of retrieving your financial loss.