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Latency arbitrageur sues FXCM for cancelling trades

First Published 31st July 2017

Last Look at Long Last

FXCM, the retail FX broker, is being sued by a client who claims the firm cancelled her profitable currency and commodity trades in 2013.

The plaintiff, Daniela Shurbanova, alleges that the broker cancelled trades that had netted her 460.000 USD - a sizable sum for a retired Bulgarian teacher. She might have been trading on behalf of her husband, who had already been banned by FXCM from trading CFDs. Between them, the couple had a total of 27 accounts with the broker - at best unusual.

The strategy which generated the disputed trades was essentially latency arbitrage. Ms Shurbanova traded on stale prices posted by FXCM in fast markets that followed significant news events such as the release of the US employment report. The brokerage has claimed that, as the prices at which the trades were executed were off-market, the trades were placed in error.

Further details are hard to come by for now, but we will update the story as they emerge. Until then, the case is a good reminder that, whether retail or professional in FX, the dealer has the last look - and occasionally the last laugh.