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Compensation from broker for Russian CFD (contract for difference)

The UK Financial Ombudsman has ordered Interactive Brokers (IB) to compensate an investor that invested in a Russian CFD (contract for difference). In this case the CFD was for 10.000 Sberbank ordinary shares. Interactive Brokers refused to close the position because they could not trade the underlying Sberbank shares Interactive Brokers had bought to cover the CFD contract. From March 2022 onwards, IB raised the margin required for the position to 100%. By August 2024 the interest alone charged on the position had amounted to around USD $12,000.  The European Securities and Markets Authority (ESMA) introduced a margin close-out rule in 2018 that states that CFD providers have to close positions once the net asset value in the investor's account drops to 50% of the required margin. The Financial Ombudsman ruled that Interactive Brokers was required to stop charging interest and other charges on the CFD position once they had to close the position on the basis of the ESMA 50% margin...
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Compensation from broker for Russian CFD (contract for difference)

The UK Financial Ombudsman has ordered Interactive Brokers (IB) to compensate an investor that invested in a Russian CFD (contract for difference). In this case the CFD was for 10.000 Sberbank ordinary shares. Interactive Brokers refused to close the position because they could not trade the underlying Sberbank shares Interactive Brokers had bought to cover the CFD contract. From March 2022 onwards, IB raised the margin required for the position to 100%. By August 2024 the interest alone charged on the position had amounted to around USD $12,000.  The European Securities and Markets Authority (ESMA) introduced a margin close-out rule in 2018 that states that CFD providers have to close positions once the net asset value in the investor's account drops to 50% of the required margin. The Financial Ombudsman ruled that Interactive Brokers was required to stop charging interest and other charges on the CFD position once they had to close the position on the basis of the ESMA 50% margin...
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Compensation from brokers for failed ADR conversion

Many investors did not manage to successfully convert their Russian ADRs because their western broker was too slow to process the request.  We are now seeing the first cases where arbitration committee's are compensating investors for these failures. We are aware of cases that were settled in the Netherlands where the broker compensated the full purchase price of the ADRs in addition to continued ownership of the ADRs as compensation for a failure to timely process a request for conversion of the ADRs into undelying Russian shares. There are also cases in the UK where the Financial Ombudsman ordered compensation for a failure by Interactive Brokers to process the request for conversion of Gazprom ADRs timely (see https://www.financial-ombudsman.org.uk/decision/DRN-5538810.pdf). We feel that the compensation rewarded could have been much higher if the investor would have presented the facts more fully (such as the statutory period of 3 years to claim unpaid dividends). Earlier the D...
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