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. Mr. Suzgun supposedly received notice from ThinkMarkets in late 2021 that USD $4.28 million would be debited (i.e., withdrawn) from his account, prompting him to take legal action against the broker.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.” According to ThinkMarkets, Mr. Suzgun only intended to utilize the Swap-Free Account in rare situations and for positions that would be held for a short amount of time, less than one day.
According to ThinkMarkets, Mr. Suzgun performed more than 90% of his transactions using the Swap-Free Account, with a significant percentage of positions held for more than a day. ThinkMarkets stated that if the trades had been completed in the “regular” account rather than the swap-free account, it would have received more than USD 1.6 million in swap Charges instead of incurring losses. 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 has denied that he violated the agreement, claiming that all of his transactions were conducted according to the terms of his agreement with ThinkMarkets. He further claims that following the disagreement, ThinkMarkets transferred his accounts to its Bermudan corporation to avoid FCA jurisdiction, despite Mr. Suzgun’s protests.
While the matter is scheduled to be heard in UK courts beginning in February—i.e., the UK courts have not yet finalized their ruling on the claims and counterclaims made by each of ThinkMarkets and Mr. Suzgun—as previously stated, the court has now ordered ThinkMarkets to return all of the “disputed funds” to its client money segregated account in the UK.
ThinkMarkets has recently made headlines, mostly for its intention to become public through a merger with FG Acquisition Corp., a Toronto Stock Exchange-listed special-purpose acquisition firm. After announcing a deal last May that would see ThinkMarkets “IPO” at a valuation of around USD 160 million by merging with FG, the transaction was eventually canceled in December after nearly all of FG’s public shareholders decided to withdraw their funds rather than proceed with the deal. That followed claims (which began here at FNG) that ThinkMarkets had accumulated tens of millions of dollars in losses and debt in 2021–2022, prompting the company’s auditors to issue a “going concern” warning.
A copy of the court order to ThinkMarkets can be seen here (pdf).