Exclusive FNG… FNG has learned that London/Australia based Retail FX and CFD broker ThinkMarkets has been issued a judgment by the Business and Property Courts of England and Wales – London Circuit Commercial Court in the amount of USD 4.28 million.
The judgment, issued against ThinkMarkets’ operating entities in the UK and Australia – TF Global Markets (UK) Ltd and TF Global Markets (Aust) Pty Ltd – is an interim injunction requiring ThinkMarkets to transfer 4,280. $818.88 in her customers’ segregated account. in the UK at 4.30pm on Monday 15 January.
The court order follows a legal dispute that ThinkMarkets has with a (now former) client from Turkey, Abdurrahman Suzgun. ThinkMarkets had apparently informed Mr. Suzgun in late 2021 that $4.28 million needed to be debited (i.e. removed) from his account, leading to the ensuing legal action against the broker.
The order, issued by the Honorable Judge Richard Pearce, states that if ThinkMarkets disobeys the order, the company (or any director or officer) may be held in contempt of court and may be jailed, fined or have its assets confiscated her details.
ThinkMarkets Dispute History
Abdurrahman Suzgun runs a trading company in Turkey specializing in forex and precious metals. In 2019 he opened an account with ThinkMarkets UK, ostensibly to hedge his own positions in his physical precious metals business.
ThinkMarkets opened two accounts for Mr. Suzgun – a “regular” trading account and a no-exchange account. Exchange-free accounts are quite common among FX/CFD brokers for clients trading under Islamic law, which does not allow interest to be charged.
In mid-2021, ThinkMarkets said Mr Suzgun had breached the terms of his agreement with the broker, claiming Mr Suzgun engaged in “exchange abuse”. ThinkMarkets claimed that the No Exchange Account should be used by Mr. Suzgun only in exceptional cases and in respect of positions that were to be carried for a short period of time, i.e. less than a day.
According to ThinkMarkets, Mr. Suzgun executed more than 90% of his trades through the non-exchange account and that a significant number of positions were held for more than a day. ThinkMarkets claimed that it would have earned more than $1.6 million in Exchange Fees on these trades had they been executed in the “regular” account as opposed to the non-exchange account, instead of the losses it incurred on the trades. This led ThinkMarkets to charge $4.28 million of what it called “disputed funds” (plus another $370,000 of “disputed funds”) from Mr Suzgun’s account, transferring the money out of the country to ThinkMarkets Australia (which acts as a liquidity provider to ThinkMarkets UK), while it attempted to negotiate a settlement with Mr Suzgun on the matter.
Mr. Suzgun denied ThinkMarkets’ allegations that he breached the agreement, stating that all of his transactions were made in accordance with the wording of his agreement with ThinkMarkets. It also claims that, following the dispute, ThinkMarkets renewed its accounts at its Bermuda entity to remove itself from the FCA’s jurisdiction, despite Mr Suzgun’s objections.
While the matter is scheduled to be heard in the UK courts from February – meaning the UK courts have yet to finalize their decision on the claims and counterclaims brought by each of ThinkMarkets and Mr Suzgun – as mentioned above, the court has indeed now ordered ThinkMarkets to return all “questionable funds” to its UK client money segregation account.
ThinkMarkets has been in the news lately mostly around its bid to go public through a merger with Toronto-listed special-purpose buyout firm FG Acquisition Corp. After announcing a deal last May that would have seen ThinkMarkets “IPO” at a valuation of around USD 160 million from a merger with FG, the transaction was ultimately canceled in December after nearly all of FG’s public shareholders decided to take their money back by FG instead of going ahead with the deal. The ensuing reports (starting here at FNG) that ThinkMarkets had suffered tens of millions of dollars in losses in 2021-2022 and built up debt, leading ThinkMarkets’ auditors to issue a “going concern” warning on the company.
A copy of the judgment against ThinkMarkets can be viewed here (pdf).
We will continue to follow this story as it develops.