An Israeli court has ordered a seizure order against Forex Place in a size of around $1.7 million for financial mismanagement in running a client’s account. The trader showed that the broker was trading against him and got a warrant to seize the broker’s assets. Here are more details.
Update: The courts cleared the company of any wrongdoings.
Israel’s Globes reports (Original in Hebrew, Google Translated) that a court in Tel Aviv ordered a seizure of 6.2 million Israeli shekels (around $1.7 million) for mismanaging the account of Majd Sheikh, that lives in northern Israel. Judge Hagai Brenner made his ruling already on Wednesday, but it was gagged in order to enable the client to start seizing the funds without disturbance.
According to the client, he was tempted to invest his money in Forex Place, understanding that the company makes money off of spreads. This was explained in October 2009, at a meeting with the managers of the company’s Haifa branch, Ze’ev Hemed and Gal Segal.
According to the client, he then invested 5.4 million shekels (almost $1.5 million) and lost his money within three months. He later understood that the company is in “an extreme conflict of interests”.
He discovered that he was deceived – that Forex Place only selectively passes the orders to liquidity providers and actually counters every position that the client makes.
So, when Forex Place (4XP) plays against the client, the client’s losses are its profits.
The manager of Forex Place, Shalom Peretz said that the matter is taken care of by the legal department of the company.
Further reading: CFTC sues 14 forex brokers for operating without registration and/or trading against their clients.
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