- U.K. mediator ruling follows record currency surge agains euro
- IG Group accepts ombudsman's ruling and compensates customers
IG Group Holdings Plc has accepted a ruling by the U.K.’s Financial Ombudsman Service that it should compensate some customers that lost money during a rapid appreciation of the Swiss franc in January, costing the spread-betting company about 1 million pounds ($1.5 million).
“The FOS found that a different contract fill level, beneficial to the client in this case, would have been more reflective of the underlying market liquidity, in what were unprecedented market circumstances,” IG said in a statement Wednesday. “In the interest of bringing this matter to a conclusion, IG has accepted the FOS determination” and will “pro-actively apply the same beneficial finding to all other affected client accounts.”
The Swiss central bank’s surprise decision to abandon a cap on the franc on Jan. 15 roiled markets worldwide and sent the currency surging to a record against the euro. IG Group said at the time “a few hundred clients” were affected by the volatility and it would review its risk-management strategy after losing money on client credit exposure.
The ombudsman, the U.K.’s independent financial mediator, accepted IG acted in accordance with its client agreements and executed trades at the best available price for a customer, and was fair in the way it processed orders, the company said in the statement.
The shares fell 1 percent to 756 pence at 8:17 a.m. in London. They have increased about 5 percent this year.
IG Group, founded in 1974 and based in London, says it’s the biggest provider of contracts for difference, financial instruments that allow clients to bet on future movements of a security without owning it.