Gain Capital slams $10 million claim as baseless
Gain Capital, the internet-based forex trading platform, has reacted angrily to a $10 million lawsuit filed against it in New York, saying that the claim is baseless and factually inaccurate.
The US network, which transacted over $200 billion in volume in 2002, is accused of defrauding clients and knowingly misleading them about their account performance. The complaint relates to business that Gain handled in association with Sterling Forex, a money manager.
The complaint was filed in January by Spencer Rawlins, a former F-14 pilot for the US Navy. He is just one of the thousands of retail investors who have been attracted to the healthy returns that forex funds can offer (see chart). He opened an account managed by Sterling, and he says he was repeatedly told that his funds were performing well, even though they had actually lost about 80% of their value.
Sterling, which cleared its accounts with Gain, has since shut down and been fined by the Commodity Futures Trading Commission (CFTC).