A Cypriot CFD broker operating in the Dutch market must refund the deposit to an investor that will evaporate its assets. This is the outcome of proceedings at the North Holland District Court.

The case concerns a dispute between a retail investor and Trade Capital Markets (TCM) Ltd, an online broker based in Cyprus. Our client entered into an agreement with TCM in January 2020 to invest in CFDs (Contracts for Differences). In the period from January 2020 to May 2023, our client deposited a total of €184,698, of which she ultimately lost €169,538.

Main points of the judgment of March 5, 2025

  1. The court ruled that Dutch law applies, despite a choice of law clause for Cypriot law in the contract. This clause is invalid.

  2. Our client was classified as a consumer despite being classified as a professional investor by TCM.

  3. The court concluded that TCM was guilty of unfair trade practices.

Applicable law

The court applied the Rome I Regulation and concluded that the choice of law clause for Cypriot law was voidable. This was because the clause did not mention that our client was still entitled to protection under Dutch mandatory law.

Consumer Status

The court found that our client was acting as a consumer because:

  • She did not enter into the agreement in the course of professional activities.

  • She invested with private funds to increase her private wealth.

  • Her experience in investing or request for a professional account were not relevant to her status as a consumer.

Unfair Business Practices

The court concluded that TCM was guilty of unfair business practices, including:

  • Deceptively classifying our client as a professional investor.

  • Failure to adequately inform about the risks of CFD investments.

  • Exerting undue pressure on our client to make additional deposits.

Effects of the ruling

  1. The court declared as a matter of law that our client validly voided the agreements.

  2. TCM was ordered to repay the lost deposit.

  3. This ruling may set precedent for similar cases against CFD brokers.

Conclusion

This ruling is an important victory for duped CFD investors. It shows that brokers can be held liable for unfair practices even if they are based outside the Netherlands. The court has made it clear that protecting consumers takes priority over contractual provisions that attempt to circumvent this protection.

Our firm has handled dozens of CFD cases since 2019 and continues to advocate for the rights of duped investors. If you have been victimized by similar practices, we encourage you to seek legal advice to discuss your options.

Read the ruling here.