Not upheld: Account closure without notice complaint against CMC Markets UK plc

Decision detail

Summary

Mr R complained that CMC Markets UK plc unfairly closed his trading account without consent, causing him significant financial losses. In May 2022, after Mr R had accumulated substantial unrealised losses and mentioned borrowing £500 from his wife to manage his positions while expressing mental and physical distress, CMC decided to close his account citing the borrowing disclosure as contrary to its terms. Mr R disputed having actually borrowed money and argued the account closure was unfair, particularly given the difficult market conditions at the time. The ombudsman found that CMC acted fairly and reasonably in exercising its contractual right to close the account with 10 business days notice, as the firm was required under FCA rules to act in Mr R's best interests when aware of potential vulnerabilities. The ombudsman concluded that the financial losses resulted from market movements, not CMC's actions, and that Mr R had adequate opportunity to close positions himself or find another broker.

The Ombudsman's reasoning

The ombudsman found that CMC acted fairly and reasonably in exercising its contractual right to close the account with 10 business days notice. The ombudsman confirmed from listening to the call recordings that Mr R did discuss borrowing money and expressed significant distress about his losses. The ombudsman determined that CMC was required under FCA rules to act in Mr R's best interests when it became aware of potential financial and mental health vulnerabilities. The ombudsman concluded that Mr R's strategy of continuously funding positions to avoid closeouts, combined with his disclosures about borrowing and mental distress, justified CMC's decision. The ombudsman also clarified that the financial losses were caused by market movements and price differences, not by CMC's actions, and that Mr R had the opportunity during the 10-day notice period to close positions himself or find another broker.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website