Not upheld: Investment mis-selling complaint against CMC Markets UK plc

Decision detail

Summary

Mr K complained that CMC Markets wrongly closed all positions in his spread betting account on 29 September 2023, resulting in a loss of nearly £16,000. CMC had sent multiple warnings that his account was approaching the close-out level, and when a stop loss triggered and his account revaluation fell below 50% of required margin, CMC automatically liquidated all positions in accordance with its terms and FCA regulations. Mr K argued CMC should have contacted him before closing positions and that he would have rectified the situation had he been available, but he was attending to a personal matter at the time. The ombudsman found CMC acted fairly and reasonably by following its contractual terms and regulatory obligations, and that Mr K's unavailability due to personal circumstances did not indicate wrongdoing by CMC. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that CMC acted in accordance with its terms and conditions, which Mr K had agreed to upon opening his account. The FCA required CMC to close positions when account revaluation fell below 50% of required margin, and CMC was entitled to do so automatically without notice. Although Mr K received multiple warnings and was managing his positions in response to them, he was unavailable when the close-out occurred due to personal circumstances. The ombudsman found this did not indicate wrongdoing by CMC, as CMC was obliged to follow its standard processes regardless of Mr K's availability. The fact that Mr K's positions had been liquidated previously, or that he had taken breaks from trading, did not change CMC's obligations on this occasion.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website