Singapore Expats Forum

Is it legal for Saxo to requote price many times higher and

Discuss your views about Singapore business & economy, current policies & issues, starting a business in Singapore.
kohll
Newbie
Newbie
Posts: 16
Joined: Mon, 26 Jan 2015

Re: Is it legal for Saxo to requote price many times higher

Postby kohll » Thu, 29 Jan 2015 10:50 pm

An example, one of the people in my group upon the close out of all the positions, i.e. stopped out with losses of 300k, but he still have a positive cash equity of 200k.
However, 12 hours later, the restatement of the CHF rates wiped out all the positive cash equity and resulted in negative equity of 1.8 million!
Saxo subsequent issued demand of payment of 1.8 million!

User avatar
JR8
Immortal
Immortal
Posts: 16514
Joined: Wed, 24 Mar 2010
Location: K. Puki Manis

Re: Is it legal for Saxo to requote price many times higher

Postby JR8 » Thu, 29 Jan 2015 11:05 pm

kohll wrote:Just tot i share my views on this.

i think when "lawyers think its contestable" it's becos......

Even if you sign a black and white contract, does not mean it can be legally binding.

google Unfair Contract Terms Act

http://en.wikipedia.org/wiki/Unfair_Con ... s_Act_1977

I guess it's up to the judge to decide if the terms in the contract satisfies the "Reasonableness test", and the validity of any exemption/indemnity (of the Company) clauses within the contract.

I think if we google enough, we should be able to find enough legal cases where judges invalidate contracts signed due to unfair terms.

I can also understand Saxo's point. If Saxo fights the case, they stand a chance (even if it's 0.0001%) to recover some money. If they just let it be, it's a 100% loss. So why not just try.

On a separate note, who the hell reads the T&Cs when they activate their iPhones .....i think if you print out the T&C in 12pt, it should be a few thousand pages. And almost 99.999% of iphone users just "I accept" in 2 seconds.

Maybe hidden in that millions of words under clause 3012.1.3 section 521 para 488 it says, "Apple has the right to charge you $10 everyday, and collect from you in 2016" ? (Legally binding?)


For the record
'Do it or do not do it: You will regret both' - Kierkegaard

User avatar
JR8
Immortal
Immortal
Posts: 16514
Joined: Wed, 24 Mar 2010
Location: K. Puki Manis

Re: Is it legal for Saxo to requote price many times higher

Postby JR8 » Thu, 29 Jan 2015 11:07 pm

kohll wrote:We would accept our losses if it does means that out positions are close out on fair terms. Pls refer to the below sequence of events for saxo

Each of us has suffered losses from our respective positions and we would have accepted it and move on. However its the subsequent of the general sequence of events that made our experiences in dealing with Saxo Capital thus far have left us thoroughly disappointed, as their actions have been grossly unfair, improper and unethical.:

• We received notifications that stated that orders on our accounts were executed, along with the corresponding rates.

• Some 12 hours after the orders were filled, Saxo Capital proceeded to retrospectively re-price these executed orders.

• It was only on or around 26 January 2015 when Saxo Capital explained the revised rates.

• As a result of the re-pricing, many account balances there were comfortably in the positive were wiped out, and went into negative.

• Despite being well aware of clients’ dispute regarding the re-pricing and Saxo Capital failing to provide satisfactory explanations, Saxo Capital began issuing Letters of Demand for negative balances and/or margin calls.


For the record...
'Do it or do not do it: You will regret both' - Kierkegaard

User avatar
JR8
Immortal
Immortal
Posts: 16514
Joined: Wed, 24 Mar 2010
Location: K. Puki Manis

Re: Is it legal for Saxo to requote price many times higher

Postby JR8 » Thu, 29 Jan 2015 11:10 pm

kohll wrote:An example, one of the people in my group upon the close out of all the positions, i.e. stopped out with losses of 300k, but he still have a positive cash equity of 200k.
However, 12 hours later, the restatement of the CHF rates wiped out all the positive cash equity and resulted in negative equity of 1.8 million!
Saxo subsequent issued demand of payment of 1.8 million!



Oh dear, awfully sad.

So why are you whining on about it here where no one cares?

Better not be seen as *using* this forum solely as a platform to bleat on and on, otherwise I suspect your ass might get fried.



p.s. Of course you're not a fee-raking lawyer touting for litigants; oh no. But hang on, what were the actual positions you had on that you're so p*ssed about, you ... er, have never said. What was your exposure when the Swiss peg got pulled, and via what positions?
'Do it or do not do it: You will regret both' - Kierkegaard

kohll
Newbie
Newbie
Posts: 16
Joined: Mon, 26 Jan 2015

Re: Is it legal for Saxo to requote price many times higher

Postby kohll » Thu, 29 Jan 2015 11:41 pm

I think each can comment on our thoughts. In any case, I am sharing my experiences that I had with Saxo with the wider group.

kohll
Newbie
Newbie
Posts: 16
Joined: Mon, 26 Jan 2015

Re: Is it legal for Saxo to requote price many times higher

Postby kohll » Fri, 30 Jan 2015 7:49 pm

Saxo Told to Hand Franc-Trade Details to FSA Amid Complaints


http://www.bloomberg.com/news/articles/ ... complaints


This show what SAXO is not doing is not right.

I understand MAS is also in SAXO Singapore office to investigate the legality of the adjustment

User avatar
JR8
Immortal
Immortal
Posts: 16514
Joined: Wed, 24 Mar 2010
Location: K. Puki Manis

Re: Is it legal for Saxo to requote price many times higher

Postby JR8 » Fri, 30 Jan 2015 8:40 pm

I've heard the cross versus the Danish Krone (peg) is a sure win. Get in large now my son, before it's too late!

[Shhhh.... don't spread it around, don't want the little investors to get in on this just yet].

Saxo being Danish, it's got a be fackin' double-bubble! [Shhh!]
'Do it or do not do it: You will regret both' - Kierkegaard

kohll
Newbie
Newbie
Posts: 16
Joined: Mon, 26 Jan 2015

Re: Is it legal for Saxo to requote price many times higher

Postby kohll » Fri, 30 Jan 2015 9:54 pm

kohll wrote:Saxo Told to Hand Franc-Trade Details to FSA Amid Complaints


http://www.bloomberg.com/news/articles/ ... complaints


This show what SAXO is doing is not right, irresponsible, and complete lack of intergity

I understand MAS is also in SAXO Singapore office to investigate the legality of the adjustment

kohll
Newbie
Newbie
Posts: 16
Joined: Mon, 26 Jan 2015

Re: Is it legal for Saxo to requote price many times higher

Postby kohll » Fri, 30 Jan 2015 9:55 pm

From our Germany friends.

Hi, in the german press several laywers explained that there is very littel chance if Saxo tries to get the "virtual" negative balance in this country.

One lawyer requested a expert report from the University another one opened a new website for cheated SAXO Customers as well.



1) He says the terms of SAXO are against European Law saying that legal action should be only in Denmark.

For the negative balance it schould happen in the country of the customer.

For request the customer has against SAXO you can choose. Denmark our your country.



2) The terms and condition of "re-quotes" are not legally complient with German law, so these are ineffective.



Also many other thing in the terms and conditions are ineffective as well.



He thinks Saxo will not sue the customers here and wants to solve this without noise.



If they loose in court in Germany on the negative balance. The customers than have the chance to sue again here to get the rest of the money the request from Saxo.



http://www.anwalt.de/rechtstipps/margin ... 66185.html



http://www.news4press.com/EuroFranken-C ... 66781.html



They have created a website to inform german customers on the news for SAXO:



http://www.peres-partner.com/saxo-bank- ... gin-calls/



Seems SAXO is destroying itself with this behaviour and the truth now coming out now more and more in public.

There only chance to survive is to correct at minimum the negative balance and mitigate the bad reputation a bit.



Not only SAXO but also the market maker model (and capriciousness re-quotes only in favor of the bank) will be history in some time based on this incident.



T.

User avatar
JR8
Immortal
Immortal
Posts: 16514
Joined: Wed, 24 Mar 2010
Location: K. Puki Manis

Re: Is it legal for Saxo to requote price many times higher

Postby JR8 » Fri, 30 Jan 2015 10:27 pm

It's got to sting. But share what your position was, so that we can feel for you too.

How about long the CHF/DKK ? Double no-brainer eh. Double-jubble, double profit => lovely! Let's go and fleece the peasants big time!! [WWWWEEEEYYYYY! LAAAAAARGE!]
'Do it or do not do it: You will regret both' - Kierkegaard

kohll
Newbie
Newbie
Posts: 16
Joined: Mon, 26 Jan 2015

Re: Is it legal for Saxo to requote price many times higher

Postby kohll » Tue, 10 Feb 2015 10:25 pm

http://www.marketwatch.com/story/danish ... 2015-02-09

Saxo Bank takes hard line on customers' FX losses

When the Swiss National Bank suddenly let its country's currency rocket on Jan. 15, Pawel Jaworski, a welding engineer from Elblag, Poland, was a loser.

Using an online account with Copenhagen-based Saxo Bank A/S, Mr. Jaworski had bet the Swiss franc would fall. He closed his trade with a loss of EUR1,000 ($1,148). "I thought, 'I'm not the winner, but it could be worse,' " said Mr. Jaworski.

It was.

That evening, Mr. Jaworski, 38 years old, checked his account again. Saxo had changed the price at which his trade was executed. He was out an additional EUR2,000. "This is two or three months' wages; this is money that I don't have," he said. The central bank had removed the franc's peg to the euro, allowing the currency to rise, ahead of the European Central Bank's launch of a bond-buying program to boost the eurozone's economic prospects.

Saxo said any losses are its clients' fault. It said its business terms explicitly grant it the right to revise prices after trades have been closed. "I think it was a fair way of dealing with it," said Steen Blaafalk, Saxo's chief financial and risk officer. "Clients that lost money can blame us, or they can blame themselves." Saxo said it doesn't comment on individual clients.

January's swing in the franc was the biggest move in the modern history of developed-market currencies. It jolted money managers, corporate treasurers and central banks around the world. It cut an especially vicious swath through the world of retail foreign-exchange brokers, who let mom-and-pop investors borrow heavily to fund risky bets.

Some brokers have taken huge losses. Others have shut. Some have forgiven loans made to clients. Denmark's Saxo Bank has taken an aggressive approach.

According to the firm's communications reviewed by The Wall Street Journal, client trading records and interviews with customers, Saxo has retroactively repriced some trades and is chasing its own customers for about $100 million in losses.

Repricing of individual trades isn't unknown in the industry, but the altering of large numbers of trades by such a big margin is highly unusual.

Denmark's financial-services regulator last week ordered Saxo Bank to provide details of its handling of Swiss franc trades on Jan. 15. The regulator declined to comment.

The big losses are a consequence of how retail brokers operate. Foreign-exchange markets are relatively placid. A 1% daily move in a currency, commonplace in stocks, is exceptional.

To magnify trades, brokers let clients put up a little cash and borrow the rest from the broker, known as margin trading. That enables an investor to leverage a smaller position into a bigger one. If the holdings rise in value, the margin will magnify gains. Likewise, if the assets decline, the losses are amplified.

In some cases, clients can trade amounts more than 100 times the actual cash they deposit.

Some Saxo customers were able to trade at a 25-to-1 margin ratio, meaning they could make a $10,000 wager on the Swiss currency by using only $400 of their own money. When the franc soared about 30% against the euro in the minutes following the central bank's decision, many customers were clobbered far in excess of the cash they had put up. That is money they now owe the broker.

Many Saxo customers said they can't afford to pay and have been treated unfairly.

One issue is Saxo's decision to recalculate the exchange rate at which losing bets were closed. The bank said the move was made to better reflect the market's chaotic conditions that day.

Wagering about $25 for each $1 put up, Tay Lip Sing, a 44-year-old technology consultant in Singapore, bet the franc would fall against the dollar. He set an automatic limit, called a stop-loss order, to close his trade if losses got too large, according to Mr. Tay and account records reviewed by the Journal. The franc climbed 18% against the dollar soon after the central bank's move.

kohll
Newbie
Newbie
Posts: 16
Joined: Mon, 26 Jan 2015

Re: Is it legal for Saxo to requote price many times higher

Postby kohll » Tue, 10 Feb 2015 10:26 pm

Mr. Tay said after the Swiss National Bank acted, he sighed in relief that he had set up the stop-loss order. His loss, he said, should have been about $900. But Saxo later told him the trade closing his position had been revised to a price well beyond the stop-loss order. Mr. Tay was out $22,800. The money was deducted from his Saxo account.

"It is like buying a ticket with British Airways for $1,000 and then finding out that the price of the same seat has been changed to $20,000," Mr. Tay said.

U.S. regulators have moved to temporarily restrict the amount of borrowed money used by currency traders, while some brokers have said they would increase margin requirements.

Saxo promotes a vision of individual responsibility free from government intrusion. The firm hands out copies of "Atlas Shrugged," Ayn Rand's hymn to individualism and capitalism, to employees and clients. It offers a free copy of the Danish translation of the novel to anyone who fills out a form on its website.

But Saxo's move to reprice trades runs contrary to some its own marketing materials. On its website, it promises "dedicated liquidity" and "no slippage" to users of its foreign-exchange trading platform.

"With Fixed Spreads from Saxo Bank, you don't have to wonder what price you'll pay to trade FX," the website said, using the shorthand for foreign-exchange trading.

In recent days, Saxo has tried to make a deal with some customers, offering discounts to the balance Saxo has said they owe if they pay promptly and don't sue, according to interviews with customers and correspondence reviewed by the Journal.

"We are actively working with clients to find a plan of action for repayment," Mr. Blaafalk said.

"I sincerely feel sorry for any client that suffers losses, and I understand investors were surprised because the move was just so extreme, " he said. "Now is the right time to come to an agreement with each individual client, and then we can all move on."

At least one other provider is chasing clients for money it is owed. U.K.-based IG Group Holdings PLC said it suffered a hit of as much as GBP30 million ($46 million) from the franc move, including GBP18 million owed to it by customers.

IG didn't reprice trades, but many customers are unhappy they were able to run up unexpected losses when their stop-loss orders weren't carried out at the prescribed price.

In letters to clients reviewed by the Journal, IG blamed the situation on a lack of available trades in the market on Jan. 15 and the large number of client orders it needed to cancel.

Marcel Zidani, a concert pianist from Evesham in the U.K., is being asked to pay more than GBP4,000 to IG after a bet against the franc turned sour. Mr. Zidani, 41, had a stop-loss order, but it took about 45 minutes to execute the trade, causing the transaction to be executed at a much lower price.

"When the SNB hit, I was flabbergasted and in a state of shock; I just saw the losses piling up on the screen," he said.

IG declined to comment on client losses.

Other brokers have been more charitable.

FXCM Inc. said last week that it would forgive loans made to small traders. Its customers in total owed it $225 million after the franc move. The New York firm received a $300 million rescue loan from Leucadia National Corp. to continue operations after the client losses threatened to put it in violation of regulatory capital rules.

Toronto-based Oanda Corp. said it didn't reprice any trades after the franc move and isn't trying to claw back cash from clients. "We felt the right thing to do was forgive the losses," Chief Executive Ed Eger said.

Access Investor Kit for Schweizerische Nationalbank

Visit http://www.companyspotlight.com/partner ... 0001319265

Access Investor Kit for FXCM, Inc.

Visit http://www.companyspotlight.com/partner ... 3026931069

User avatar
JR8
Immortal
Immortal
Posts: 16514
Joined: Wed, 24 Mar 2010
Location: K. Puki Manis

Re: Is it legal for Saxo to requote price many times higher

Postby JR8 » Tue, 10 Feb 2015 10:31 pm

So the Polish guy (your top recent post) took out an FX bet, and got burned for several months wages?

Hahaha :shock: How unwise was that!?

[No sympathy at all. To be clear, it's nothing to do with nationality AT ALL [mods note pls ;)], just a good example of the maxim; 'fools and their money are easily parted'. If you're fool enough to take a bloody great risk, then you have to be man enough to accept the consequences].


p.s. couldn't be bothered to read the rest of you epistle-length latest vendetta instalments vs Saxo.
'Do it or do not do it: You will regret both' - Kierkegaard

kohll
Newbie
Newbie
Posts: 16
Joined: Mon, 26 Jan 2015

Re: Is it legal for Saxo to requote price many times higher

Postby kohll » Tue, 10 Feb 2015 11:09 pm

If Saxo is a broker, i.e., acting on your behalf to execute your order in the market, once they confirm your fill price then there should be no change to the trade unless their counterparty denies the trade or the exchange busts it.

If Saxo is acting as a counterparty, i.e., trading against you, then once they confirm your trade there should be no changes.

Saxo could be fudging between the two roles and failing at both. They could be internalizing trades and acting as counterparty when it favors them, and then acting as broker if they lose money and sticking customers with the loses. You could get the 'fill' price you expect even if they make more by crossing the trade internally against another customer order or by holding your order to see if markets move favorably, but if they eventually trade at a loss then you bear the loss. Heads they win, tails you lose.

User avatar
JR8
Immortal
Immortal
Posts: 16514
Joined: Wed, 24 Mar 2010
Location: K. Puki Manis

Re: Is it legal for Saxo to requote price many times higher

Postby JR8 » Tue, 10 Feb 2015 11:12 pm

If you're not trading direct to the exchange, this is how it is.

'I took out a hugely speculative bet, and it turned sour. Boo-hoo! It must be everyone else's fault but my own.'
'Do it or do not do it: You will regret both' - Kierkegaard


  • Similar Topics
    Replies
    Views
    Last post

Return to “Business in Singapore”

Who is online

Users browsing this forum: No registered users and 2 guests