Does anyone have experience with a broker going belly up and not being able to recover your investment?
I personally don’t, neither does most people
As long as you stay whithin well known brokers, you should be all good
I’m actually speaking to a guy on another thread on babypips that is not able to recover his funds.
but going belly up (insolvent) is different from not being able to get paid your money
it’s like this
if the broker is reputable and they go insolvent , the insolvency manager that handles the account will pay out the retail traders what’s in their account
they will then sell off the company or sue to pay for recovery of their costs
so Retail traders get paid out.
but if the company is dodgy then , the same rules apply, but it can get hairy and investors may not get paid out.
Thats not quite right bro. As a retail trader with a retail broker they go to great pain in their PDS to explain you are an unsecured creditor and as such you’re the last on list to get whatever is left. Which by the time they’ve paid out secured creditors will probably be nothing
2 Likes
In your dreams.
It will depend on what’s left, and on how and in which country and by whom they’re regulated.
As so often, in the world of trading, regulation is the big issue that’s relevant, here.
In the UK, for example, if they’re FCA-regulated, the trader can rely on a government-backed guarantee to cover the first £80,000 in the account. Without anything like this, it’s much more common to lose most or all of the money.
@LaughingCharlie
No, Actually, IN REALITY
also, Be Aware i am referring ONLY to Australian Law.
i’ve seen this happen, i know how it works, i know the reality of it,
beyond that , Say what you will.
I’m not here to argue, i’m here to tell you the reality of how insolvency works.
Don’t believe me, Call a lawyer and ask.
When a broker or any other company goes insolvent, it’s irrelevant who they want to pay first,
the company handling the insolvency makes the decision.
simple as that.
Then say so, for God’s sake! There was no mention of Australia in your post.
It all just comes across as your customary misinformation, which does the forum such a disservice.
Unsecured creditors in Australia have a right to any available funds after (and this is big) cost of liquidation have been met, priority payments (employee entitlements) and secured creditor payments. Any remaining moneys is then paid as a dividend to unsecured credits. No money left, no dividend.
Now a typical Australia Retail Forex broker PDS
Since *** acts on your authorisation to withdraw all of the funds which you deposit as your payment of Margin for your Account(s), typically your more significant credit risk arises when the moneys are withdrawn and paid to *** (rather than the risks for when your money is in the client trust account). From the time of the withdrawal from the client moneys trust account, you are taking credit risk on *** because you become an unsecured creditor of ***.
@LukasVisser do you always remember to put in your post what country you are from ?
I have previously mentioned that i was from Sydney
Now if i forgot to mention it somewhere, ok, i apologise
but do you really need to over react like this
Try to relax a bit … ok
i haven’t killed anyone or anything like that… Relax