Controversial retail FX brokerage IronFX could perhaps be compared to a cat with nine lives, its flagrant non-payment of withdrawals to introducing brokers and direct retail customers across the world having been the source of mainstream media campaigns against the company’s business practices, particularly in China, and even government-level discourse in its home nation of Cyprus.
IronFX continues to operate, its CySec license fully valid, despite owing over $1.6 million in tax to the Cyprus government, having an unpaid withdrawal toll of $176 million to global clients, and a litany of law suits against the firm amounting to $564,000 in China alone.
Recently, FinanceFeeds reported that two senior principals of IronFX were addressed by judiciary in Shanghai Pudong Supreme Court of the People’s Republic of China, yet the firm continues to operate, whilst the Cyprus press continues to write incorrect accounts of outcomes of cases against the company.
As far as regulatory apathy is concerned, CySEC received 1700 complaints concerning IronFX in total, but has thus far pretended that most of them were false, double, and produced by an organized campaign. Currently, according to our research, at least 1,512 clients have filed disputes against IronFx with the Cyprus Financial Ombudsman, which is the arbitration body for all matters financial in Cyprus. The Cypriot newspaper reports that 300 cases have been decided, but none of them have been made public information.
This is remarkable as it took place after FinanceFeeds reported the institutional levels of corruption at CySec which provided clear information that demonstrates that the CySec investigation into 1,000 complaints about the missing $176 million in client funds was not conducted by independent body but instead by an IronFX UK lawyer, and that only 20 cases were used as a sample. The conflict of interest renders the entire audit null and void, and our full report can be read by clicking here.
Other very important matters that were not covered and not mentioned by CySec in this particular report include action by the European Ombudsman which has issued a decision on a complaint filed by an Hungarian client against the ESMA not taking action against the CySEC.
This decision is not conclusive, but it contributes toward taking the IronFX situation to a public audience. The office of the European Ombudsman is currently working on the issuance of a conclusive decision against the ESMA, if ESMA does not take appropriate measures before the end of March this year.
In addition, the Financial Ombudsman of Cyprus has issued some decisions. The Cypriot newspaper 24h.com.cy reports of 300 decisions against the clients.
It is entirely possible that European clients could file a lawsuit in their home country. Some Hungarian clients are going to do that, and there are also new enforcement possibilities for damaged clients, which are being advocated by certain groups of traders across Central Europe.
As long as the impotence of the regulators across the European Union, including ESMA, and the perceived covering up continues in Cyprus, IronFX will continue to cast its shadow over the genuine and bona fide firms that operate in what has matured to become a comprehensive hub for the entire FX industry, hence it is everybody’s professional responsibility to ensure that these matters are dealt with accordingly.
This week, FinanceFeeds obtained the official document sent to a customer by the Cyprus Financial Ombudsman, hinting at corruption within.
The entirety of the document makes points including that this entity is not independent and cannot provide a real alternative dispute resolution. In effect, the Ombudsman denies the profit of the client, by accepting the allegations of IronFx that the clients has performed “abusive trading activities”.
Whilst it is clearly detailed in the terms and conditions that IronFX attaches to its trading accounts and requires clients to agree to that what the company self-determines as “abusive trading activities”, it is very important to note that under European Union law, contractual terms must be “fair”. Unfair term & conditions are not binding for consumers and therefore void, as detailed here.
In one particular instance that FinanceFeeds is aware of, the Financial Ombudsman Service was unable to produce any evidence of the activities which IronFX consider to be “abusive trading activities”. In one specific documented case, it is stated that on 01/03/2015 a client with no abusive trading activities listed was trading from the same IP address as other clients who are considered abusive. Additionally, the Financial Ombudsman Service cannot submit real evidence for hedging, and that the contractual terms are void, since unfair according to EU law
Astonishingly, Cyprus regulatory bodies, which should protect clients, are attempting to prove IronFx right to withhold clients funds ($176 million), which is a remarkable stance.
FinanceFeeds has an official document from the Financial Ombudsman Service detailing several cases in full, however this is not for publication as it contains the details of customers of IronFX in several jurisdictions, however it is clear from this stance that there are ulterior motives in maintaining IronFX’s continued business outside what is considered appropriate under the standard laws applicable to most businesses.
News Source: https://www.news-in-europa.com/2017/04/03/corruption-in-cyprus-ombudsman-goes-against-clients-in-favor-of-ironfx-financefeeds-investigation/