Title: Behavioral Indicators of Non-Disclosure and Absence of Margin Consent under FinSA
Author: Joe L. White, Jr.
Date: July 01, 2025
Reference: Conciliation Request – Nexo AG, Canton of Zug
Purpose
To demonstrate, through behaviorally aligned facts and legal inference, that the claimant did not knowingly consent to margin-based investing. This is evidenced by the complete absence of protective financial behavior typically associated with risk-aware margin exposure. Such inaction supports a claim of deficient disclosure under FinSA Articles 8, 10–12.
The claimant’s actions are consistent with an individual unaware of being exposed to margin risk.
Factual Background
In 2021, during a period of personal and professional burnout, I transferred the lifetime of my earnings intended to provide generational financial security for my family to Nexo’s platform based on its public representations as a compliant, interest-bearing, Swiss-based custodial service. At no point was margin exposure disclosed or inferable from the onboarding process.
At no point was I informed that my account operated as a margin-based structure. No loan-to-value ratio, margin threshold, or credit risk disclosure was provided before or after funding the account.
During the crypto upswing, my holdings more than doubled. But I did not take profits or reduce exposure. I did not exit the market as conditions shifted. Instead, I remained fully invested. I first learned that my account was subject to liquidation only after the first LTV notification indicating that my account equity was dangerously low and beyond my skill to salvage. In the U.S., banks are not permitted to offer margin accounts without regulatory safeguards, and I had no prior margin trading experience nor were any protective tools like stop-loss, LTV dashboards, or liquidation warnings made available on Nexo’s platform.
My inaction, specifically failing to hedge, reduce exposure, or trigger stop-loss behavior after gains is not consistent with high-risk tolerance. Rather, it is consistent with someone misled into believing they were operating within a fully collateralized, custodial investment account.
No reasonable investor knowingly engaged in leveraged investing would have remained passive through a drawdown after substantial gains. My behavior, while irrational for a seasoned trader, is entirely consistent with someone misled into believing they held an unleveraged custodial product.
Claimant Perspective
Like many professionals recovering from burnout, I turned to what I believed was a safe, passive financial platform. The interface and absence of both warning indicators and margin trading protections led me to believe my funds were in a stable savings environment.
In my twenties, I served as the youngest branch manager of a U.S. brokerage firm during the 1987 market crash. I personally issued margin calls to clients and witnessed firsthand the destructive power of leverage. As a result, I developed a lifelong visceral and paralyzing fear of margin products and have actively avoided them my entire life. It is inconceivable that I would have knowingly placed my family’s future into such a risky investment.
The absence of any strategic hedging, risk offsets, or margin mitigation behavior coupled with platform features that concealed loan-to-value exposure suggests a structural omission of FinSA-mandated disclosures (Art. 8, 10). This is not hindsight bias; it is documentary evidence of non-consent.
Supporting Evidence or Reasoning
- Swiss Financial Services Act (FinSA): Articles 8, 10–12 require platforms to assess investor suitability and provide risk disclosures proportionate to product complexity and user profile.
- Swiss Supreme Court Ruling BGE 133 III 97: Recognizes that behavior inconsistent with risk awareness may indicate invalid or uninformed consent.
- Federal Act on Data Protection (FADP, SR 235.1): Nexo failed to provide margin or transactional logs following lawful access requests under Articles 25–28.
- Platform Design: No LTV dashboards, margin usage summaries, or proactive alerts were available, obstructing meaningful consent or user self-protection.
Statement of Intent
This annex is submitted in support of a good-faith civil conciliation request under ZPO Art. 202–204. The claimant asserts that the conduct described herein warrants regulatory attention and damages due to misrepresentation and unsupervised financial intermediation. No proprietary platform information is disclosed, and all references are based on claimant usage, public materials, and industry guidelines.
Disclaimer
This document is submitted in good faith, based solely on the claimant’s personal experience and publicly available facts. No confidential or privileged information has been disclosed. All statements reflect the claimant’s beliefs or recollections unless otherwise indicated. Names of third parties are anonymized or redacted where not publicly implicated. The purpose of this release is transparency, accountability, and resolution not defamation or harm.
Legal Context Note
This annex was authored solely by the claimant as part of a lawful civil conciliation filing under Articles 202–204 of the Swiss Civil Procedure Code (ZPO). It does not contain any confidential statements made during the conciliation hearing, nor does it disclose settlement terms or other protected materials governed by ZPO Art. 205.
The annex is based exclusively on:
- Personal experience,
- Publicly available information, or
- Facts the claimant is legally entitled to share.
Its purpose is to document the legal and factual basis for the claimant’s grievance, promote transparency, and serve the public interest where legal oversight may be insufficient.
The annex adheres to Swiss privacy and defamation standards under ZGB Art. 28, the Data Protection Act (DSG), and applicable banking/professional secrecy provisions (BankG, StGB Art. 321).
It is not an official court document, and no information disclosed herein was obtained through the hearing process.