I'd be looking closely at the terms and conditions agreement. It looks like this arb was nothing more than the exploitation of a typo possibly a rounding error. Really no wonder that it looked too good to be true. It was simply leveraged up to a scale that made it profitable via a triangle hedge.
When I read the agreement I see swap payments are made by adjusting the value of the underlying currencies. Section 11.2. Looks to me like this is where the error occurred.
They also have a clause that allows them to adjust the account to reflect any errors made to the underlying currencies. (23.1c)
Seems to me they are looking at huge losses from a position that should have been hedged perfectly and was not due to a clerical error. Only way I see to keep the profits is to prove that it was something else that occurred and the arb was legit. If it was legit it wouldn't be exploiting a single broker and would work on other platforms. My understanding is that it does not.
I guess I am playing the devil's advocate. They are pricks if the criminal action lines are true. My guess is someone in management doesn't have an understanding of what is going on, and it simply looks like someone found a way to 'cheat'.
If it were me I'd expect to get my accounts paid out instantly, in full. I'd be happy to lawyer up to make that happen. Whether the fight for the profits is worth it would be a question I'd ask him... but seems to me their legal team should have their butts well covered and he would advise me to drop it. Only the lawyers get paid. But might be worth fighting for a settlement.
Interesting situation. Learned a lot. I'd love to hear where I'm out to lunch.
Mike
As I understand arbitrage $$$ comes straight out of crims/brokers pockets... (That being the case, conversely we wouldn´t put Jem out of business would we 
: ) 
