Russian Association of Financial Markets Members

(RAFMM)

 

Claim # 3-06/2011

 

DECISION

 

November 1, 2011

 

Guryevsk town

 

June 14, 2011, the RAFMM Arbitration Committee received a complaint from Mr. Ponomaryov, begging to consider his situation: he claims that the company unreasonably withdrew USD 1083,43 from his account #5033181 within June 8-10 period. According to the Complainant, the Company explains its actions by the fact that the profit was credited to PAMM account # 5004160 by mistake; he invested in this account USD 200 on May 26 and June 6, 2011, which he had already withdrawn from the PAMM account and credited to his own account by the moment the dispute broke out.

The Complainant begs the RAFMM Arbitration Committee to take into consideration his opinion: the investor is not obliged to pay for mistakes made by the broker, even if they did occur; the responsibility for any internal errors lies with the company alone. The Arbitration Committee asked the Complainant to provide the statement of trading account #5033181 and the correspondence with the Company’s officials in relation to the disputable situation and the Company – the comments on its unreasonable actions.

 

Having considered the material of the complaint, the Arbitration Committee

 

ESTABLISHED:

 

1. The material of the complaint filed by Mr. Ponomaryov is true.

2. In his comment the Company’s representative clarifies that:

- The Complainant (account #5033181) invested USD 200 in PAMM account #5004160;

- Owing to a mistake in calculations, USD 1712,96 were refunded to the account of the Complainant. In compliance with the conditions of the PAMM programme, USD 529,53 of the abovementioned amount were credited to the account of the PAMM trader, thus the net profit of the Complainant made with the deposit of USD 200 constituted USD 1183,43;

- From the moment of investing to that of funds withdrawing from the PAMM account by the Complainant, the managing trader was carrying out trades which caused a total loss of approximately USD 6000, so the Company’s representative is sure to have made no profit with the investments;

- After the calculation mistake was discovered, the Company took USD 1045,07 off the account of the Complainant and credited this sum to the account of the PAMM trader. According to the Company, the reason for this action was as follows: due to unprofitable trading of the PAMM trader, the investment of the Complainant was unprofitable as well: there were only USD 138.36 left from USD 200 invested in the PAMM trader’s account by the moment of investment finish; the rest of the funds was wasted by the managing trader during carrying out trades;

- The difference in the amount taken by the Company is caused by the following fact: it was not until the Complainant applied to the RAFMM Arbitration Committee that USD 38.36 were credited to the account of the Complainant. In addition to the comments, the Company’s representative provided also the report on the trades made on the PAMM account related to the dispute considered.

3. The RAFMM Arbitration Committee requested the Company’s representative to provide more detail about methods of calculating results of investments on the PAMM account and examined the documents presented by the Complainant.

 

During the dispute consideration, the RAFMM Arbitration Committee established that there were mistakes made at calculating and correcting the Complainant’s investments. In particular:

1. Almost all the loss on the PAMM trader’s account for the dispute period was driven by a trade on Silver of 15 lots opened by the managing trader at 9:10 on May 26 of total result –USD 5625. This trade was included in calculation period of the investor, yet the Complainant credited funds to the PAMM account in two steps at 12:40 and the loss on his trade was registered before he entered the PAMM system.

2. The same happened to another large-volume trade on Gold: it was also included in the calculation period due to the time of its closing, though it was profitable. However, the profit was calculated only partially, because the Company (just like in the abovementioned case) calculated the result proceeding from the trade opening time, not the moment when the Complainant entered trading.

3. The RAFMM Arbitration Committee drew the Company’s attention to the fact that in accordance with the Agreement provided by the Company all calculations are conducted on the basis of equity of the account, not balance. Thus, the result of the investment in question should be reconsidered and corrected in compliance with the Regulations. The Company provided a newly calculated result and, before the dispute consideration was over, made correction to the Complainant’s account at 19:29 on August 25.

 

On the basis of the abovementioned facts, the RAFMM Arbitration Committee

 

DECIDED:

 

Since during the consideration of the case the Defendant willingly corrected the mistakes made in the calculation and fulfilled the obligations in relation to the Complainant, to regard the demand of the Complainant as satisfied and the dispute – as settled.

 

EXPLANATIONS ANS RECOMMENDATIONS:

 

Even though the method of calculating results of investments in PAMM accounts is a know-how of the Company, the RAFMM Arbitration Committee draws the attention of the Complainant to the point that the more open and transparent the calculation system is, the better the Company’s customers will understand this mechanism and the fewer cases of suspicion and misunderstanding will occur between the Company and its customers which will definitely have positive effects on the Company’s reputation and, as a result, will foster business expansion and contribute to firmer positions of the Company on the market of profile services.

The decision delivered by the Arbitration Committee is approved by the RAFMM executive board.

RAFMM President,

Evgeny Staroviborny