In terms of your statement "It is impossible for legal action.", I do fully disagree. However your statement on the length of time for recourse is spot on. Legal actions from overseas proves more difficult as in the U.S. all persons involved in legal action have the right to face their accuser. Many investors find it a nuisance to travel overseas for multiple court dates.
As I would never recommend an investor/client to work with a broker that is not registered within that brokers jurisdiction. Brokers in the states must hold U.S. registrations. There are multiple things that people who invest need to know when dealing with a broker regardless of that brokers location. The assets transferred is the most questionable. Seriously, what would incline anyone, anywhere, to send funds to a broker that is in the Caribbean yet the assets are held in Hong Kong? If your adviser is in the U.S. then your assets should be transferred to a U.S. bank. These banks that hold clients funds are clearing firms or clearing houses. Some general securities firms hold their clients assets, and are mostly market makers. Many broker/dealers however are agency firms where the clients assets are held at a separate, fully disclosed clearing firm.
There is a ton of information that investors should look into prior to opening a new trading account with a broker. If you ask a broker these questions, and they begin stuttering and avoiding the questions, seek someone else.
