The court order, issued against both of ThinkMarkets’ UK and Australia operating entities, TF Global Markets (UK) Ltd and TF Global Markets (Aust) Pty Ltd, is an interim mandatory injunction requiring ThinkMarkets to transfer $4,280,818.88 to its client money segregated account in the UK by 4:30 pm on Monday, January 15.
The court ruling stems from a legal disagreement between ThinkMarkets and a (now-former) client from Turkey, Abdurrahman Suzgun. ThinkMarkets notified Mr. Suzgun in late 2021 about a USD 4.28 million debit, prompting him to sue the broker.
The order, issued by His Honour Judge Richard Pearce, specifies that if ThinkMarkets violates the order, the firm (or any director or officer) may be found in contempt of court and imprisoned, fined, or have its assets seized.
Background on the ThinkMarkets dispute.
Abdurrahman Suzgun owns a trading enterprise in Turkey that focuses on currency and precious metals. In 2019, he established an account with ThinkMarkets UK, reportedly to hedge his actual precious metals assets.
Mr. Suzgun now has two accounts with ThinkMarkets: a “regular” trading account and a swap-free account. Swap-free accounts are quite prevalent among FX/CFD brokers for clients who trade under Islamic law, which prohibits the charging of interest.
In mid-2021, ThinkMarkets stated that Mr. Suzgun had violated the conditions of his broker agreement by engaging in “swap abuse.” ThinkMarkets claimed Mr. Suzgun planned to use the Swap-Free Account sparingly for positions lasting less than one day.
ThinkMarkets claimed Mr. Suzgun used the Swap-Free Account for over 90% of transactions, with many positions exceeding one day. Completing trades in the ‘regular’ account instead of the swap-free account would have earned over USD 1.6 million in swaps. That led to ThinkMarkets debiting $4.28 million of what it termed “disputed funds” (plus another $370K of “undisputed funds”) from Mr. Suzgun’s account, transferring the money out of the country to ThinkMarkets Australia (which acts as the liquidity provider to ThinkMarkets UK), while it looked to negotiate a settlement with Mr. Suzgun
Mr. Suzgun asserted that he strictly followed the agreement, conducting all transactions in accordance with its terms with ThinkMarkets. He claims ThinkMarkets transferred his accounts to its Bermudan corporation, avoiding FCA jurisdiction, despite his protests after the disagreement.
The UK courts will hear the case in February, as they have yet to rule on claims by ThinkMarkets and Mr. Suzgun. The court has ordered ThinkMarkets to return all ‘disputed funds’ to its client money segregated account in the UK.
ThinkMarkets recently gained attention for its plan to go public via a merger with FG Acquisition Corp., Toronto-listed. ThinkMarkets planned a merger with FG and an IPO valued at USD 160 million, but shareholders withdrew, canceling it. Claims emerged that ThinkMarkets faced massive losses and debt in 2021–2022, leading auditors to issue a ‘going concern’ warning.
A copy of the court order to ThinkMarkets can be seen here (pdf).
