Contract for Differences – Case Study

After successfully bringing a Claim for a Financial Litigation Client, we share a case study of the process.

Contract For Differences

Mrs. X was approached by JNF Capital who advised her to invest in a complex and exotic financial product called Contract for Differences (CFDS) – a form of risk financial speculation called derivative trading.

Recent FCA guidance clearly indicates that CFD products should only ever be offered to high net worth and sophisticated investors who can afford to lose the investment. Despite the FCA warning, however, 76% of retail customers who bought CFD products on either an advisory or discretionary basis lost money over a twelve-month period.

Mrs. X was not a sophisticated investor or a high net-worth individual.

How Did We Act?

After an initial consultation with Mrs. X, Oakwood Solicitors obtained and reviewed Mrs. X’s client file and prepared a series of detailed legal arguments which were presented to the Financial Services Compensation Scheme (‘FSCS’) for assessment.

The FSCS adjudicator upheld Mrs. X’s claim and awarded full compensation which  amounted to over £13,000.

Testimony

Could I Have a Claim?

Here are a few key indicators that you may have a claim:

• Retail Investor – Were you an investor who only had basic investment experience, such as shares and bonds in secure reputable companies, or held no investments at all?
• Contact – Where you contacted out of the blue by a CFD Trading advisor?
• Knowledge – Did you invest into something that you didn’t really understand? Did you have little or no knowledge of how CFDs worked?
• Pressure – Did you feel you did not have time to get independent advice, research the investments or take your time to decide if you wanted to proceed? Were you pressurised to act quickly or risk losing out?
• Risk Consideration – Did the advisor fail to explain the risks associated with the investment including the potential that you may lose more than your original investment?
• Losses – As a result of the investment, have you suffered a financial loss?

If you answered yes to any of the above – You may potentially have a claim.

Further reading

CFD Trading – Oakwood Solicitors

WHAT TO DO NEXT

For any enquiries regarding Investment or other Financial Litigation, get in touch today for a free initial consultation in complete confidence. Choose one of the methods on the right-hand side of this page, or call us on 0113 200 9720 to find out how we can help you.