Did anyone else lose serious money when Tradefreedom liquidated our forex accounts on Oct. 5? A class action could be possible.
Who the hell are them
TradeFreedom Securities Inc. is an on-line broker owned by Scotiabank, that had a forex service they closed in October.
I hadn’t heard this news before, but I know from previous experience with Refco that Canadians are protected. I’m not sure about others. In Canada, Forex client accounts must be segregated from the company’s funds so that nonsense like Refco won’t impact clients. Plus accounts are insured to a maximum of $1,000,000 by the CIPF for member firms such as MF Global.
In my case, after a delay of a few months I got every penny back from my Refco account.
Edit - TradeFreedom quit as a CIPF member in late 2008, so that option isn’t available. That should have been a red flag for all their clients.
Your Refco case sounds interesting.
When I got the Tradefreedom forex account last April (2009), they claimed to be a CIPF member. CIPF is for protection in case of the investment firm’s insolvency.
Tradefreedom liquidated all forex accounts just because they closed their forex service - no option to transfer our accounts. But when I opened the account there was no warning that could happen. Other Canadian forex accounts are transferred from one Canadian forex broker to another.
So if anyone else was hit by this, a class action should be possible.
I still couldn’t find anything concerning this problem. I did find several references to the launch of TradeFreedom Forex though:rolleyes:. I remember well the publicity Refco got so this must have been really low profile. My guess is that the circumstances were different because TradeFreedom as a stock and options broker is still a going concern.
I just don’t understand how they can liquidate a division without making their clients whole. There must be recourse with some regulatory body in Canada. I wonder why the Globe and Mail hasn’t been involved. They usually like a story showing how poorly the Canadian investor is protected. The class action route is a poor alternative. American Refco clients were talking the same thing and four years later they haven’t made much progress
Oh by the way, I noticed that TradeFreedom still prominently displays their CIFP membership and logo on their website. I checked the CIFP website and TradeFreedom is listed as a former member firm.
Do you mean they went bankrupt and therefore lost your money, or they decided to not continue offering services and you were floating a losing trade on your account?
I see. That is amazing that they claimed CIPF membership (and still do) when they weren’t a member. You’d think that would be fairly serious misrepresentation.
The primary regulatory body is IIROC. I’ve gotten very poor results from them (and “investor protection” is a key part of their mandate).
Like you, I don’t see how they can get away with liquidating our accounts just because they closed their service.
I’ll bear your comments in mind. Thanks.
If Jason’s question was to me, yes I had unrealized losses that got realized when they liquidated my account. (Go ahead and kick me, like I am already.)
Don’t intend to kick while you’re down 
Just wondering because CIPF applies to losses due to a firm being bankrupt rather than the losses due to trading.
This Just Isn’t Right. I mean they plastered the internet with notification of their new Forex service and not a peep when they closed down. I even remember their ads about the new service.
If they didn’t go bankrupt, they must have known in advance they were closing, so why couldn’t they give a month’s or a week’s notice? Seems to me that some legal advice is worth obtaining, although unless you live in Toronto or Vancouver, the level of expertise is probably inadequate.
Once in awhile discussion of a single regulatory body in Canada gets some politician talking. If your local representive has any clues about investing, he would be an option.
To avoid misunderstanding: they claimed to have sent notice (by one e-mail to forex clients), but I didn’t receive it. The key point, however, was when I opened the account not knowing they would liquidate it if they closed the service, since they didn’t disclose that.
I would be astounded if my federal representative had any understanding of such matters, or could help. Provincial either, for that matter.
Right. This wasn’t a case for CIPF. It’s just amazing that they can keep claiming CIPF membership for more than a year since they ended it. Not to mention why they wouldn’t have it, as a broker of a major Canadian bank. And it did encourage me to deal with them when I saw the CIPF membership display on their web site.
I really don’t like your chances of getting redress. If they claim they sent an email, the onus is on you to prove you didn’t and that isn’t easy. If you have an email provider like mine (Yahoo), it probably ended up in your spam folder unless they are on your contact list. If it got into spam and you’re like me, it might or might not get read.
I don’t like the fact that there was no public announcement of their intentions to close down, but they may not have had a legal obligation in that regards.
My Refco experience has little or no relevance to this situation. That was a bankruptcy and takeover transaction. To their credit, Refco Canada did a great job of keeping clients advised during the process and of course there was lots of media coverage.
That is just my armchair lawyer opinion and is freely offerred. A real lawyer could put you on the right track and will before a class action suit goes anywhere.
Again, I appreciate the comments.
Actually, I see now how they claim CIPF membership. Tradefreedom is part of Scotia Capital Inc., which is a member. It just looks strange that Tradefreedom itself was a member but now isn’t.