When a broker doesn't pay your money:

Losing your life savings to a dishonest broker is every investor's nightmare. Whether it was tempting f orex trades or investments in CFDs, instead of the promised profits, empty accounts and a bitter sense of betrayal remained. What now? Recovering money from a company based abroad seems complicated, if not impossible. But today we know that justice is achievable even in such cases. Thanks to a key decision of the Czech court, the way has been opened how to proceed against these foreign brokers and how to recover the lost funds. We'll take you step-by-step through how the process works and advise you on why it's important to take action now.

Author of the article: ARROWS advokátní kancelář (Mgr. Jáchym Petřík, office@arws.cz, +420 245 007 740)

Narrative introduction to the problem: A defrauded investor and the feeling of powerlessness

Story: Mr. Novák (name changed) is a small business owner and experienced entrepreneur. When he was approached by a foreign online broker with an offer to value his spare funds, he decided to invest. At first, everything looked great - the platform showed profits and the broker's representative assured Mr. Novak that his strategy was making money. The enthusiastic investor gradually deposited several hundred thousand crowns into his account.

But a few months later, the shock came. Mr Novák asked to withdraw part of the profit, but the broker suddenly cut off communication. The platform began to show losses and eventually blocked access. The savings, which until then had been growing at least on paper, virtually disappeared. When Mr. Novak tried to contact the broker's headquarters, he found that the company was based in Cyprus and only responded to his emails with an automated reply.

Helplessness and a sense of powerlessness grew - how to get the foreign company to return his money?

Such stories are not exceptional. Disappointed investors often suffer not only from financial loss but also from the guilt of having "fallen for it". Many are reluctant to fight for justice because they assume that pursuing a claim outside the Czech Republic is unnecessarily expensive and a foregone conclusion.

But Mr Novák decided not to give up. He turned to experts and found out that there are legal tools to recover what he is owed even from a foreign broker. And he is not alone - recent developments are opening the door to redress for all aggrieved investors.

What changed the situation: the groundbreaking decision of the Municipal Court in Prague

Until recently, foreign brokers could use their headquarters outside the Czech Republic to escape liability. Czech aggrieved investors may have had a ruling in hand that they were entitled to compensation, but enforcing it abroad was a huge problem. A recent ruling by the Municipal Court in Prague has brought about a change, which can be described as a breakthrough in investor protection. What happened?

The Czech Republic has a Financial Arbitrator - an independent body established by the state to which consumers can turn in disputes with financial institutions (including securities traders). A number of defrauded investors have therefore turned to the Financial Arbitrator, which in many cases has found in favour of the victims and ruled that the foreign broker must return the money or compensate for the damage. But even with the arbitrator's decision in hand, investors faced another hurdle: how to get the foreign broker to respect the decision and pay up?

The key problem was that until recently, the Czech financial arbitrator did not issue the necessary certificate under the European Brussels I bis Regulation, which would allow his decision to be enforced (executed) in another EU Member State. Without this "paper", the arbitrator's decision did not have the necessary weight abroad. Thus, the foreign broker could pretend that the Czech decision did not concern him, and the Czech investor was again left with the feeling that the law would not reach across the border.

The Municipal Court in Prague, however, issued a judgment that changes this. In its precisely reasoned decision, it found that the Financial Arbitrator's procedure - i.e. the refusal to issue a European Certificate of Enforceability - was erroneous. In other words, it confirmed that the decision of the Czech financial arbitrator can be effectively enforced abroad. The court ordered that the arbitrator's decision be accompanied by a certificate under EU law, making the decision an enforceable title valid across the European Union.

This breakthrough opened the way for justice. Foreign securities traders, often based in countries like Cyprus precisely with the intention of making enforcement more difficult, can no longer escape accountability so easily. For Czech investors, this means that if they succeed in a dispute (whether in a financial arbitrator or in court), they can now get their money back much more easily - even if it is physically "trapped" in accounts abroad.

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How recovery works step by step

When we realise that there is a chance of recovering the debt, the question arises: How to proceed? Recovering claims against foreign brokers is a process that has several stages. Below we describe step by step how such a process usually works:

1. Case evaluation and evidence gathering:

the first step is to analyse your case in detail. A professional law firm (such as ARROWS) will review all documents with you - broker contracts, trading platform statements, communications (emails, chats) and other evidence of your deposits and withdrawal attempts.

At this stage, it is also assessed which jurisdiction the dispute falls under and which legal instruments can be used. If you have already contacted a financial arbitrator or other authority, these procedures will also be taken into account.

2. Filing a petition with a financial arbitrator or a court in the Czech Republic:

the optimal course of action will be chosen based on the analysis. In most cases, if you are a consumer (non-professional investor), it is preferable to go first to the Financial Arbitrator of the Czech Republic. This procedure is free and the arbitrator has a specialisation in financial disputes. An attorney will help you to write a proposal to the arbitrator that includes all relevant facts and evidence.

If your case does not fall within the scope of the arbitrator's jurisdiction (or if the arbitrator is unsuccessful), a claim will be prepared in court - typically in the Municipal Court in Prague, which has jurisdiction over disputes with a cross-border element in investment services.

3. Proceedings and decision in the case:

Once the application is filed, the actual proceedings begin. The process with the financial arbitrator is in writing - you submit your claim and the broker has the opportunity to respond (many non-serious brokers ignore the response, but this does not prevent the arbitrator from making a decision). The arbitrator or court will then issue a decision.

Ideally, the decision says that the broker has been at fault and should pay you a certain amount (money invested, possibly lost profits or other damages). This decision is the cornerstone of recovery - it states that you have a right to receive payment.

4. Obtaining a certificate for foreign execution:

After a winning decision (e.g. an award by a financial arbitrator), you need to make sure that it is enforceable abroad. Now, thanks to the aforementioned judgment of the Municipal Court in Prague, the financial arbitrator will issue a certificate under EU law that his decision is enforceable.

Similarly, if a court were to decide, the European Regulation allows for the issue of a so-called European Enforcement Order. These formal confirmations are crucial for the next step - allowing foreign authorities to treat our decision as their own.

5. Enforcement abroad:

with the decision and the European certificate in hand, enforcement (execution) can be carried out in the country where the broker has its registered office or assets. In cooperation with local lawyers or bailiffs, an application for enforcement is filed - for example, attachment of the broker's accounts, seizure of his assets, etc.

Within the EU, this process is considerably easier thanks to uniform rules: a court in another Member State will recognise a Czech decision (or a decision of a Czech arbitrator with a certificate) almost automatically. The law firm that represents you coordinates the process and communicates with the relevant authorities abroad.

The aim is to force the broker to pay the amount owed, either voluntarily or by compulsory execution.

6. Collection of the amount recovered and closure of the case:

Once the foreign authorities execute the execution, the recovered funds (your capital, any interest or damages awarded) flow back to you, typically through the account of the law firm or bailiff. The debt is thus successfully recovered.

Costs are also dealt with at this stage - if the broker was clearly in breach, the decision may also impose an obligation to pay the costs of the proceedings or execution.

In any case, professional legal assistance will ensure that the whole process is done correctly and that you do not lose your money due to an administrative error or ignorance of the different rules abroad.

The risks of waiting and why you need to act quickly

If you are a victim of unfair practices by a foreign broker, time is your enemy. Unfortunately, many aggrieved investors wait in the hope that the situation will somehow improve itself - perhaps the broker will eventually pay out the money voluntarily, or that some other easy way will emerge. Such an approach carries serious risks:

• Hiding or diverting assets: the longer you delay, the more time you give the rogue broker to hide or divert your assets. Firms may transfer money to other accounts, transfer assets to related parties or affiliates, or even move their headquarters to another jurisdiction outside the reach of European law. It would then be much more difficult (and sometimes impossible) to recover anything from these funds.
• Dissolution or bankruptcy of the company: if a broker discovers that there are multiple lawsuits or judgments against it, it may cease operations or declare bankruptcy in its country. In a foreign bankruptcy proceeding, your claim would then be satisfied together with other creditors - often only partially. And in the event of a complete collapse of the company, the chances of getting the money back would be slim. By filing a claim quickly, you increase the likelihood of getting ahead of potential bankruptcies and catching the broker while it is still in business and has assets.
• Prolonging and complicating a legal dispute: evidence and testimony fade over time. The later you take action, the harder it is to find evidence - old emails may be deleted, trade records untraceable, witnesses (e.g., former broker employees) unavailable. In addition, legal proceedings themselves take time; if you start them years later, the limitation period (typically 3 years from the time the claim arose, or shorter in some cases) may have passed and your claim will not be enforceable. A quick response will therefore prevent you from losing your right because of time.
• Psychological stress and loss of confidence: the psychological impact cannot be overlooked. Every month of uncertainty about whether you will definitely lose your money means stress for you and your family or business. Also, trust in the investment environment itself can decline - the longer justice does not come, the harder it will be to trust other financial institutions. By moving quickly to take enforcement action, you give yourself a chance to close this unpleasant chapter and gain peace of mind.

In summary: it does not pay to postpone the solution. As soon as you discover that you have been the victim of fraud or broker misconduct, take legal action immediately. Time plays against victims, but in favor of the perpetrators - so it's important to take the initiative before it's too late.

Summary of practical steps for aggrieved investors

On the basis of the above, here is an overview of concrete steps that should be taken by any investor who finds himself in a similar situation:

• Don't delay and take action: As soon as you suspect that your broker is not acting honestly (not allowing withdrawals, communicating evasively, violating agreed terms), start addressing the situation. The sooner you initiate enforcement action, the better your chances of success.
• Document everything you need: collect all evidence and documents. Save your trading platform statements, email communications with the broker, contracts, payment receipts, screenshots of suspicious transactions - in short, anything that proves your deposits and the broker's actions. These documents will be crucial to the arbitrator and the court.
• Get professional legal help: Contact a specialist law firm with experience in investment fraud and cross-border recovery (e.g. ARROWS). Experts will assess your claim, advise you on the most appropriate course of action (arbitrator vs. court) and guide you through the entire process. The first consultation is often a no-obligation consultation to find out what your chances are.
• Use a financial arbitrator: if possible, file a complaint with the Financial Arbitrator of the Czech Republic. He can decide in your favour relatively quickly and free of charge. Thanks to a recent court ruling, his decision can then be used abroad. Lawyers can help you with the formulation of your application to the arbitrator and the further procedure.
• Prepare for foreign enforcement: after obtaining a decision (from an arbitrator or a court), you need to turn it into an enforcement title abroad. In practice, this means obtaining a European certificate and initiating enforcement in cooperation with the attorneys at the broker's office. This coordination is usually handled by your law firm - they will ensure communication with the authorities in Cyprus or elsewhere and see that the process goes smoothly.
• Don't give up: even if the whole process takes time and requires patience, persevere. If you have the law on your side, a dishonest broker can no longer rely on getting away with his practices. With the help of a lawyer, the chances of seeing your money again increase significantly.

Call to action: ARROWS helps you get justice

Finally, it is important to stress: you are not alone in this. If you have been defrauded of money by a foreign broker, or suspect that this is happening, contact the experts.

ARROWS has extensive experience in capital market debt recovery and has successfully resolved a number of similar cases. We understand how devastating financial losses and the feeling of having nowhere to turn can be - which is why we emphasize an empathetic approach and the utmost professionalism.

Banish the feeling of helplessness - take the first step to getting your investment back. Contact our ARROWS team today for a no-obligation consultation about your case.

Together, we will discuss your options, plan a specific course of action, and get down to the business of recovery with full commitment. Our knowledge of Czech and European law and experience with cross-border disputes is the best weapon against dishonest brokers. Don't take injustice lying down. Contact us and regain control of your finances. ARROWS is ready to stand by your side and bring your fight for justice to a victorious conclusion.

Contact us - together we will turn the court decision into real money back and close this unpleasant chapter of your business or investment with the best possible outcome for you.

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