Not upheld: Investment mis-selling complaint against Pepperstone Limited

Decision detail

Summary

Mr L complained that Pepperstone wrongly closed his trading positions and that he was unable to deposit funds via bank card to prevent this. Mr L had £84 equity when markets closed on 19 January, but when markets reopened on 21 January his account had gone into negative equity due to price movements and spread widening, triggering an automatic position closure. Mr L also complained about failed bank card deposits on 13 December and 18 January. The ombudsman found Pepperstone acted within the account terms and that the card failures were not caused by Pepperstone. The ombudsman concluded Mr L had alternative funding methods available and could have deposited additional funds to mitigate the risk but chose not to do so.

The Ombudsman's reasoning

The ombudsman found that Pepperstone acted in accordance with the account terms when closing positions due to negative equity. The data provided by Pepperstone showing the account went into £13.20 negative equity was more persuasive than Mr L's calculations. The bank card deposit failures were not caused by Pepperstone and were likely due to Mr L's bank or Pepperstone's security measures. Critically, Mr L had alternative funding methods available (bank wire) which he had used successfully, and he could have made an additional deposit between 19 January and 21 January if he wished to mitigate the risk. The ombudsman concluded Mr L chose not to add further funds despite knowing his equity was very low.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website