Echelon access

I would strongly agree with you here - Clients cannot be classified as 'Professional' under MiFID just because they've been on some expensive seminar or course. I would think that there are very few 'Private Investors' which are classed as 'Professional' unless they specifically request it.

MiFID is a directive. The FSA still has COD (Conduct Of Business). Check out the following link;

http://www.fsa.gov.uk/pubs/other/mifid_classification.pdf

The whole document is fairly interesting but section 2.3 appears directly related to this discussion.

The problem is this; are peeps suggesting that they shouldnt be classified as 'Intermediate'? If this is so then it wont automatically make you 'retail' since you may have signed the Customer Agreement where you agreed to be of a status with less protection. The point I am making is that you may have a case against 'wrongful classification' but if the business no long exists then you're taking you claim down a possible dead end. This my cause a problem for the person who allowed these classifications to take place (if he or she is an FSA qualified person) but it won't get your money back.

It really would be helpful if someone had a copy of the T&Cs.

Steve.
 
Unfortunately, I don't have a copy of them now..they did used to be on the website, but obviously that isn't around anymore. I guess like many others I had no idea that my money wasn't safe because TU assured me that it was. Tu say they are now representing all the people who have been on the course, but I have heard nothing from them in weeks now. It would appear a decision hasnt yet been made from the liquidators as to who is to be credited or what funds remain. I really don't know anymore...
 
Hi robgrant,
I also feel very let down by TU, I am unsure which path to follow either trust greg and allow him to fight for our money or go it alone,
I also feel that greg made assurances that the money would be safe and echelon was pushed as the way to go. (it was in the training manual)
If you do follow the class action path I do not think you will be alone.
lynda
 
Yes, he'll probably try to distance himself from all this as much as possible.

The poor boy (Greg Secker) has lost a major cash cow because of Echelon's demise. As their best IB (Introducing Broker) it is thought that he may have received up to 50% in some cases of your spread! The loss of this income is a big blow to his business.

A few points to note if you wish to consider legal action...

I know someone who felt his wrath with regards to what he (Greg Secker) considered to be libellous statements on a website that was set up about him. His lawyers are amongst the best in London and crushed all dissent without too many problems whatsoever.

If you are going to go the class action route then make sure all your ducks are in a row and you have a war chest large enough to fight.

Good luck...
 
@ Robgrant...

Sorry, I forgot to add in my previous post that I heard it was a client and not one of their own but if it was one of their own people that makes it all the more interesting...
 
FTSE In Mouth---

I'm not intending to libel Greg Secker, but as someone who is paid for his expertise and his advice he has a duty of care to his clients. My feeling - and this is a personal opinion - is that he and his employees repeatedly pushed Echelon as the platform of choice and, given Echelon's clearIy perilous financial situation and the fact that funds held we're unsegregated putting them outside of FSCS regs, they should have made their clients aware of the risks involved in simply having an account with Echelon, before they even started trading.

I also think that the compensations and benefits that TU recieved as Introducing Broker, clouded their judgement and rendered the information and advice that was paid for as 'not the best available' and clearly 'not in the best interests of the client'.

Once again, I'm no lawyer, but I know I could be sued for behaving like that in my profession, so it follows that so should TU.

Assuming you could afford to and/or could find a lawyer to take them on.
 
I agree entirely. Had I known there was a risk to my capital or even what 'nonsegregated' meant, let alone its implications, I absolutely would not have gone with echelon.
 
stevespray said:
What are the rules on declaring such a 'soft commission' arangement?
Click to expand...
Under MiFID when there is any commission splitting arrangements, this needs to be disclosed to the client. On request, the broker has to declare how much any introducer is being paid (or the formula used to calculate any rebate).

I think if TU has misrepresented the Echelon product - perhaps through stating funds were segregated when they weren't - and received money for persuading clients to deal through them, this would constitute fraud. I haven't any knowlege of the documents or the arrangement though - but it would be interesting to see them
 
Is the thinking that we will not be able to anything through the FSCS? The letter from KPMG appears to indicate that this is a possibility?
 
Risk disclosure form

I think someone has asked for this!

Also worth looking at this: FSA Handbook - Full Handbook

The agreement clearly states that client money is kept in the Echelon Wealth Management Client Account so where do people get the idea that it is not segregated? Obviously if Echeleon have accessed the client account and used the money for trading purposes on their or a clients account then they will be held to account and maybe the larder is bare. So this is where the FSA should step in and after a prolonged period of time cash should be paid out.


Riftvalley
 

Attachments

  • Risk Disclosure Form.pdf
    1.6 MB · Views: 402
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Change of liquidators

Also, have you noted that KPMG are no longer the liquidators and that it is now:

Please be advised that the appointment of Blair Nimmo of KPMG LLP as provisional liquidator has been recalled and that Anthony Spicer and Stephen Cook of Smith & Williamson were appointed joint interim liquidators of Echelon Wealth Management Limited by the Court of Session on 11 November 2008.

All correspondence should now be sent to

Smith & Williamson, 3rd and 4th Floor, 206 St Vincent St, Glasgow
or to Smith & Williamson 25 Moorgate, London.

R
 
Riftvalley said:
I think someone has asked for this!

Also worth looking at this: FSA Handbook - Full Handbook

The agreement clearly states that client money is kept in the Echelon Wealth Management Client Account so where do people get the idea that it is not segregated? Obviously if Echeleon have accessed the client account and used the money for trading purposes on their or a clients account then they will be held to account and maybe the larder is bare. So this is where the FSA should step in and after a prolonged period of time cash should be paid out.


Riftvalley
Click to expand...

I don't have any knowlegde of the Echelon mess, but there's no suggestion in the Risk Disclosure you posted that clients funds were kept segregated. Admittedly they were apparently kept in a Client Account, but it doesn't state that it is deemed segregated.
 
You're right that that's what should have happened but, according to the risk disclosure notice, all clients we classified as Intermediate Customers. This classification disappeared with MiFID in November 07, but when it was active firms were not obliged to hold intermediate clients' assets in a segregated account.

The FSA handbook does not refer to it, as the classification no longer exists and companies should have re-classified clients either as ECPs or customers. Only customers would benefit from having their funds segregated. If Echelon were using an outdated customer classification, we don't have any confirmation of the status of clients' funds. I agree that legally they should have been segregated as long as clients were classified as 'customers', but do we know that this is the case?

Also, as mentioned on another thread here, there is a trend towards SB companies segregating free cash, but specifically excluding funds used for margin from this segregation (City, Finspreads and I think CMC do this). Not sure about Echelon.
 
Thanks ns1000,

I think that too many people draw too many conclusions or speculate on causes or outcomes.

I think that the basic facts are fairly simple:

1. Echelon is in receivership.

2. A large deficit built up on a specific clients account.

3. There has been a breach of Client Money Rules as laid down by the FSA.
(I assume that this is where money that should have been segregated 'leaked').

4. Deficit balances built up across several accounts (this may be relatively minor and simply due to the accounts being closed when Echelon declared bankruptcy. I assume that Echelon have not place 'ghost' trades using clients names!).

5. Clients funds were not properly segregated (this implies that they should have been!)

6. Initially the liquidators need to pursue the specific debtor account for recovery of the lost money.

7. Liquidator is liaising with the FSCS to determine the FSCS role.

8. KMPG have now been replaced by Anthony Spicer and Stephen Cook of Smith & Williamson who are now appointed joint interim liquidators of Echelon Wealth Management Limited by the Court of Session on 11 November 2008.

9. No such thing as an intermediate customer.

So that is all we know at this point so please anchor all speculation to this issues.

Probably a good idea to contact the FSA/FSCS to make sure that anyone with a claim is know to them.

Finally, all funds are supposed to be segregated under FSA rules (except where actually being dynamically used in the execution of a position).

So looks like a long wait while they sort themselves out and prove that there is no other way to recover the monies other than the FSCS which will then take more time! My guess is about a year.

Hope that the full force of the law falls on all those that supported the 'specific client' who ran up the bad position and allowed this to develop.

Shows you what happens if you put the decimal point in the wrong place!

Note, that under FSA rules your broker is obliged to tell you exactly what commissions are paid - so just ask how much MF Global is paying to TU - I know do you? Please post your answer!

My last thought is: have all users of T2W checked that their broker fully segregates their funds and how can they prove it?
 
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newbie query

Hi all

I'm very new to this website, which I unfortunately found after signing for the TU university course. Had I read the various comments before, I would not have signed up, but now I stand to lose the whole course amount (2K) if I cancel, because it's over 7 days since I signed up. I gather they are probably better lawyers than they are traders, so I would be fighting a pointless, unpleasant fight, so I might as well go along and try to get as much value as I can from this 'course'.

May I ask a couple of queries for whoever has attended their 2 day course:
- what is your experience of TU in terms of trading strategies, support, and ultimately their ability to teach/coach you to make money consistently (perhaps not from day one, but eventually by sticking to their rules very carefully)
- I was told I had to get Sharescope, do I also need to open an account with a broker, in which case, what should I look for in order not to repeat the Echelon debacle ?

Thanks in advance
 
TU couse

Hello Hermione, I did the TU course last April and to be honest I really enjoyed it, the weekend was full of information and very well put together, we were put in groups and I am still incontact with several of my group.
If you are new to trading then this course will give you foundation you need (suport/resistance, stop losses, targets, risk management etc)
The follow up with your mentor is very useful, my advise is spread them out so you get help as you progress, they will also help you with yourfuture direction.
After the course you can also listen to the gradcalls, they are very good I would recommend you listen to them weekly because it explains whats going on in the markets (I listen on a friday morning as a free download from there website - still getting it 9months later)
The people are friendly and helpful ok its a business so nothings for free.
I feel this is a very good course for beginners although there system uses trends which are not easy to find at the moment but it does work.
Sharescope is great well worth the money and I would recomend IG Index as a broker
When you have finished the course please feel free to contact me again
Since doing the course I have finished work and am training to be a full time trader.
good luck and enjoy the course:clap:
I wish I was coming with you (remember people often report the negative not the positive)

lynda:)

Hermione said:
Hi all

I'm very new to this website, which I unfortunately found after signing for the TU university course. Had I read the various comments before, I would not have signed up, but now I stand to lose the whole course amount (2K) if I cancel, because it's over 7 days since I signed up. I gather they are probably better lawyers than they are traders, so I would be fighting a pointless, unpleasant fight, so I might as well go along and try to get as much value as I can from this 'course'.

May I ask a couple of queries for whoever has attended their 2 day course:
- what is your experience of TU in terms of trading strategies, support, and ultimately their ability to teach/coach you to make money consistently (perhaps not from day one, but eventually by sticking to their rules very carefully)
- I was told I had to get Sharescope, do I also need to open an account with a broker, in which case, what should I look for in order not to repeat the Echelon debacle ?

Thanks in advance
Click to expand...
 
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