Not upheld: Service failures generally complaint against LMAX Broker Limited

Decision detail

Summary

Mr Z complained that LMAX Broker Limited took too long to update his AML records in September 2022, preventing him from depositing funds into his CFD account. When his positions fell below margin requirements and he could not add funds to maintain them, LMAX liquidated his positions, resulting in approximately $48,000 in losses. The ombudsman found that while LMAX's communication could have been clearer, the firm was entitled to require complete AML information before accepting new deposits, and even if they had responded faster, the margin liquidation would likely have occurred on the same date. The ombudsman also noted that Mr Z had been on notice since November 2021 that information was outstanding and chose not to reduce his positions when warned of margin issues on 23 September 2022. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that while LMAX's communication could have been clearer, particularly in not explicitly informing Mr Z when his funding ability was disabled in October 2021, the firm was entitled to require complete AML information before accepting new deposits. The ombudsman concluded that even if LMAX had responded within two business days to Mr Z's 20 September 2022 submission, they would likely have requested further information on 24 September 2022, which Mr Z would have provided on 25 September 2022, with LMAX completing their review on 26 September 2022 - the same day the margin liquidation occurred. Therefore, the delay did not materially cause the losses. Additionally, Mr Z had been on notice since November 2021 that information was outstanding, and despite being warned of margin issues on 23 September 2022, he chose to open new positions rather than reduce exposure.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website