So, eToro did some faux paus in the Russian Stock Controversy in which eToro forced their clients into trades and closed positions. Later, eToro refunded the wronged clients, gave a shitty apology, and then said a bold statement in which they will do it again.
Some Twitter user, actually read their terms and agreement, and blasted their ‘findings’ to the twitter space. Findings such that eToro ‘may’ lend their clients securities. These aren’t new statements or terms, but they were ‘new’ to someone and evidently many other people.
To be fair, lending securities without your permission is standard practice of Brokers. That’s why you shouldn’t trust em. So when someone learns this for the first time, it’s like learning where your meat comes from or how they ‘prep’ your food in the back kitchen. Or learning that cheese is milk rot, or kimchi is just rotten cabbage. Yea, it’s that unsettling for people, and if you’re Korean then you’re probably triggered. Nice.
Anyways, here’s a picture of the tweet describing the mess;
These disclaimers are also in their November 2022 statement and their Sept 2021 statement.
Essentially eToro said;
“we may lend out your shares without you knowing,
-you consented to this in this terms and agreement,
and we may profit from it,
in which we have no obligation to share those profits to you,
and you may lose your voting rights”
In all honesty, it’s a pretty shitty worded statement to have in your terms and conditions.
Imagine buying a car but someone else can loan it out and not give you any of the profits, and also they might just take your driving privileges away. All in all, this is a very unfair shake. A bad deal.
Which is me summarizing about the same results as the Twitter user’s deductions. -Also, this tweet was shared on Reddit in which it garnered more than 10,000 interactions. So a lot of people (and bots) share this sentiment.
With eToro’s amazingly outstanding Track record of burning bridges and screwing over some of their so called ‘clients’, they seem to be very sus.
I’m here, to remind you not to trust any broker.
Because Brokers are not your friend.
If they can make money behind your back, or off the sweat of your brow, they will. The whole business of a broker is to arbitrage and exchange goods or services to make money as a ‘middle man’. Meaning their profits come from either one or both of the parties in the exchange of goods or services rendered. Their intrinsic business model is a guarantee they aren’t working for free, so there’s definitely a profit incentive that ‘motivates’ them to do what they do in ‘providing a service to you’. They are either going profit from you, the other party, or both. That’s literally the only option if they want to make money.
It’s like the oldest Mercantilism trick in the book. Fleece and con the ungnowing ones.
There’s nothing wrong with peddling goods and services, but there is something in saying you’ll promise to peddle stuff at a certain price and then start taking advantage of your clients with an elaborate scheme of kickbacks.
And this is all without making a big hub-bub about the whole ‘beneficial ownership’ of shares. That in itself is a crime against the financial commonwealth of collective society as a whole. Yea, it’s kind of a bad deal. A Scam if you will.
Also,
Here’s their 2022 statement on Conflicts of Interest in Clause 7;
They ‘may’ have interests that conflict with yours or between you and their other clients.
Here’s an old 2021 disclosure statement;
“The way we make money creates some conflicts with your interests” Why add ‘some’?
This isn’t even a ‘may’ create conflicts of interest. They blatantly say that their way to make money creates conflict of interests. Either they are admitting to what they do, or someone on their legal team needs to be reprimanded for writing in something dumb. Legal jargon -people- you’re supposed to give room for plausible deniability such as ‘may create conflicts of interest’ instead of just omitting the ‘may’ part.
*sigh*
They make my job too fucking easy. That job being, to remind you of what you need to know. -And what you need to know is that:
Brokers aren’t your friend.
They’ll make money through margin, lending, and PFOF.
And if they’re not offering you a rebate or some cash from lending or PFOF, then you’re the product, not the customer. -Or perhaps you’re the customer that has a conflict of interest with their other customer. . . You know, seeing as traders take one side of the trade. They just might be tipping the scales against you. Quite possibly, Maybe.
In Closing,
The takeaway is simple and it applies to more than just eToro. It’s that;
Brokers aren’t your friend.
Not Financial, Legal, Life, or Any Advice
P.S.
The twitter photo has a porn hub tab. Just for your gnowledge.