Not upheld: unauthorized sale of shares / forced liquidation complaint against Freetrade Limited

Decision detail

Summary

Mr H complained that Freetrade sold his US shares without permission when his W-8BEN tax form expired. Freetrade had sent seven messages notifying Mr H of the requirement to renew the form, and the account terms and conditions permitted forced sale if a valid form was not maintained. The ombudsman found that Freetrade acted fairly and reasonably in selling the shares as required by law and contract, and did not uphold the complaint despite Mr H's financial loss from the sale timing.

The Ombudsman's reasoning

The ombudsman found that Freetrade was required by law to hold a valid W-8BEN tax form for US share holdings. The firm provided adequate notice through multiple messages and emails about the expiring form and the requirement for renewal. The terms and conditions explicitly permitted forced sale of shares if a valid form was not maintained. Although Mr H suffered a financial loss due to the timing of the forced sale, this was a consequence of regulatory requirements rather than unfair conduct by Freetrade.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website