Online trading platform Plus500 is reported to have become the subject of legal action, owing to accusations that the company has been “rigging” its contracts for difference (CFD) markets. Plus500 offer contracts for CFDs for shares, commodities, forex, and over half a dozen cryptocurrencies.
Also Read: With Bitcoin’s Price Above $6000 USD, Satoshi Nakamoto Should Be on Forbes’ Rich List
Plus500 Is Accused of Intentionally Delaying the Execution of Trade Requests
Luca Salerno, a representative of Giambrone, the European law firm that is currently preparing the class action lawsuit, discussed the class action against Plus500 with the Australian Broadcasting Corporation. “We have more than 600 people who got in touch with us, and we’ve managed to turn 30 percent into actual claims,” Mr. Salerno said. Plus500 is listed on the London Stock Exchange and offers trading products internationally through subsidiaries located in Australia, New Zealand, South Africa, Cyprus, and Israel.
Mr. Salerno states Plus500 engaging in “rigging the platform”, accusing the company of failing to execute its customers’ requesting trade actions in a timely manner. Mr. Salerno states that “each client lost $10,000 [USD], typically, within a timeframe of a couple of months.”
“I Think the Way [Plus500] Set up Their System Is Very Unfair” – Yousif Sadik, former Plus500 customer
Mr. Slareno alleges that the Plus500 is able to do this through letting its customers trade CFDs, rather than the underlying assets represented by the CFDs. “Let’s say I make a bet today on bitcoin going up,” Mr. Salerno explained, “[Plus500] would say ‘by the time we managed to execute the transaction, bitcoin went down again.” Mr. Salerno states that Plus500’s practices “fl[y] in the face” of UK market regulations, and accuses the company of “build[ing]… delay[s in transaction execution] on purpose.”
Yousif Sadik, a former customer of Plus500, asserts that he has witnessed the platform delay the execution of action requests on multiple instances. “To be honest, I feel that was deliberate because it didn’t happen just once. If it was a one-off … you could understand it. But if it’s something that persisted every week, you really need to look into your service.” Mr. Sadik alleges that disruptions consistently experienced whilst attempting to access Plus500 via a mobile app resulted in him losing thousands of pounds.
“I think the way [Plus500] set up their system is very unfair. They basically disable the instrument whenever they want”, Mr. Sadik told media. “You should be able to open close positions as you please, but this is not how it works. It’s more like gambling than trading.”
A Representative of Plus500 Has Refuted the Purported Lawsuit
A Plus500 representative is reported to have told the Australian Broadcasting Corporation that there is “no outstanding litigation against the company”, and that it has “received no correspondence from lawyers [associated] with Giambrone.”
The spokesperson asserted that signing up to sue Plus500 necessitates that an individual pass the company’s screening process which “requires each customer to pass a knowledge test, state [their] level of experience with derivative products … and other questions regarding their economic profile and appropriateness.” Plus500 also claims to take “reasonable steps’” to achieve “the best possible result” for trading customers.
In order to evaluate Plus500’s screening process, Mr. Salerno intentionally failed the knowledge test provided by Plus500. Mr. Salerno states that he was then taken to a page providing a waiver that prospective customers can sign and upload in order to gain access to the platform, despite having failed the knowledge test. “By clicking that waiver, I was effectively saying I’m not really qualified to do this trading … and that is something they cannot do,” said Mr. Salerno.
What do you make of the allegations made against Plus500? Share your thoughts in the comments section below!
Images courtesy of Shutterstock, Plus500, Giambrone
Do you agree with us that Bitcoin is the best invention since sliced bread? Thought so. That’s why we are building this online universe revolving around anything and everything Bitcoin. We have a store. And a forum. And a casino, a pool and real-time price statistics.