LONDON, Nov 4 (Reuters) - Online trading firm CMC Markets has offered to refund clients for all of the losses resulting from the company’s repricing of losing trades in the Swiss franc’s surge in January, members of a client group fighting the company said on Wednesday.
CMC Markets declined to comment except to say that it does not discuss issues relating to individual client accounts.
Two CMC clients told Reuters separately that the company had called or contacted at least six customers who were fighting it over losses from the removal of Switzerland’s cap on the franc on Jan. 15.
An initial opinion from Britain’s Financial Ombudsman (FOS) last month, seen by Reuters, ruled against CMC, which plans to float its shares in a public offer next year, on a complaint over one client’s losses.
The decision ruled CMC must rescind changes it had made to the detriment of customers in the pricing of their trades on the day and gave the company until Nov. 3 to respond.
One of the clients said in an email to Reuters: “In the communication (to us) they said that although they don’t agree with the initial FOS adjudication ... due to the length of time its taken to resolve, CMC are offering to reverse the cash adjustment they made on the 15 Jan and make a small credit to each account.”
CMC Markets, owned chiefly by businessman Peter Cruddas, declined to confirm those details or to say whether it objected to any of the Ombudsman’s decisions.
A spokesman also declined to say how many clients were involved or how much the company stood to lose from the changes. One of the clients said he was part of a group of at least 15-20 individuals fighting the company on the issue.
Investors who had leveraged bets on the euro and other currencies against the franc lost billions when it appreciated up to 40 percent in a few minutes after the removal of the cap, the biggest market moves in a major currency in modern times.
Some brokers and banks repriced trades, which had initially been confirmed as completed at better rates, later that day.
Bankers say discussions and legal action between major banks, brokers and investment managers over the issue has been common in the aftermath but so far has largely happened behind closed doors. The fight of groups of individual clients with major online trading firms like CMC, IG Index or Denmark’s Saxo Bank has been more public.
The FOS decision showed CMC would for example have to reprice the dollar franc trade in that case from 0.85598 francs per dollar to 0.99368 francs.
CMC said in January it had sustained some losses from the franc trades.
The Ombudsman assesses cases individually and has a 150,000 pounds ($231,585) ceiling on how much it can award.
$1 = 0.6477 pounds Editing by Jeremy Gaunt and Mark Potter