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EFT fraud? Specialist question.

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Please help! I had an EFT valued at 130p, I placed a stop loss at 122. The next day the broker sold the EFT at 92 claiming the SL was triggered. 

The EFT didn’t fall under 129 all  day! I have lost a lot of money, approx 22% of my investment. 

«1345

Comments

  • The broker claimed the eft (3lus) hit a ‘yellow band’ - the platform is Hargreaves Lansdown. There is no warning on the platform that this could happen. Could they have sold the EFT at 92 and bought it themselves so making 22% profit?? I have made a  complaint.
  • dunstonh
    dunstonh Posts: 119,638 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    Where is the fraud that your post subject refers to?

    the EFT didn’t fall under 129 all  day! I have lost a lot of money, approx 22% of my investment. 
    I assume you mean ETF and not EFT.    can you give us the name of it?

    Are you sure it didn't fall during the day and then when back up again by the end of the day?


    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • dunstonh said:
    Where is the fraud that your post subject refers to?

    the EFT didn’t fall under 129 all  day! I have lost a lot of money, approx 22% of my investment. 
    I assume you mean ETF and not EFT.    can you give us the name of it?

    Are you sure it didn't fall during the day and then when back up again by the end of the day?


    Sorry yes ETF !! The lowest price on the day was 128.492 according the the LSE. 
  • I am shaken
  • dunstonh
    dunstonh Posts: 119,638 Forumite
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    What ETF was it?

    What does the broker say when you asked them why they sold at that price when you say the ETF never fell that low?
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • GeoffTF
    GeoffTF Posts: 2,021 Forumite
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    Raise the issue with HL.

    ETFs do sometimes have price spikes, particularly the less traded ones. When you trade an ETF, you should always study the recent price movements, and check that the price and spread offered make sense. It is safer to use OEICs if you do not know what you are doing. (Having said that, you should be OK with Vanguard's bulk trading service. I do not worry about using that for small trades.)

    Stop losses are dangerous, as you have just found out. Spread betting providers had (and perhaps still do) a reputation for sharp downward price spikes that were not present in the underlying stock price.
  • dunstonh
    dunstonh Posts: 119,638 Forumite
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    debaura12 said:
    The EFTA allows consumers to challenge errors and have them corrected within a 45-day period with limited financial penalties. When errors occur, EFTA outlines requirements for banking institutions and consumers to follow.

    OK thanks for that. But surely Hargreaves Lansdown should offer some kind of associated warning?
    You probably find they do.  However, it will likely be in the list of other warnings they have to issue on all the other things and becomes a long list of things to read.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • debaura12
    debaura12 Posts: 9 Forumite
    First Post
    dunstonh said:
    debaura12 said:
    The EFTA allows consumers to challenge errors and have them corrected within a 45-day period with limited financial penalties. When errors occur, EFTA outlines requirements for banking institutions and consumers to follow.

    OK thanks for that. But surely Hargreaves Lansdown should offer some kind of associated warning?
    You probably find they do.  However, it will likely be in the list of other warnings they have to issue on all the other things and becomes a long list of things to read.
    I would think that there must be a bold warning if placing a stop loss could result in a sale of 22% of under the market value, don't you?
    I find it unreasonable that such an order could be placed and deemed as in any way correct practice to exercise at a cost to the client of 22% of market value. 
  • GeoffTF
    GeoffTF Posts: 2,021 Forumite
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    What was the ETF? Even the largest ETF on the planet can have price spikes:

    https://www.barrons.com/articles/sudden-s-p-500-etf-price-spike-highlights-value-of-limit-orders-1419360316

    The market itself can also have spikes:

    https://en.wikipedia.org/wiki/2010_flash_crash
  • k6chris
    k6chris Posts: 784 Forumite
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    OP - Which ETF?  Others - Does the Bid-Ask spread widen on ETFs in the way that it would do on an illiquid share??  If so, it is quite possible a stop loss could get triggered without the quoted mid-price hitting that level. 
    "For every complicated problem, there is always a simple, wrong answer"
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