NFA Dead Forex Firms Walking

[forex scholar]

Cleaning up with the Caveman

I have been pressed for time and thus the Caveman Challenge has floundered as a result. But the cavemen are coming off three straight winning weeks. The Savior misunderestimated the knuckles dragging, club wielding, forex tabulating Australopithecines churning out signals over at cavemanforex.com

While only a fool would judge a signal provider favorably after checking out only a handful of trades amongst hundreds I will admit these cavemen have proved they are far superior to the monkeys who worshipped that stone slab in the opening scene from a Space Odyssey 2000.

So the Savior retracts his dis-endorsement of cavemanforex. Judge them by their numbers, not their body hair and sloped foreheads…

 

[forex scholar]

ACM Comes Out of the Dark...

… and into the light. For years ACM has operated on the fringes of the legitimate forex dealer world but they have now seen the light. ACM is the newest registered forex dealer to become a member of the NFA.
BASIC Details

This move coincides with ACM’s move to get a banking license in Switzerland. Looking forward to seeing that first net capital number boys…

 

[forex scholar]

The Scholar's Greatest Hits- Part I

It has been one year since the Scholar started posting about the misdeeds and misadventures of the undercapitalized and the criminally minded in the retail foreign exchange world. To mark that anniversary here is a rundown of the top stories from a year of woe and sloth in retail forex. Cue up the Benny Hill Music…

1) One World Capital Blows Up
Without question this former forex dealer is the poster child of this thread. In July of 2007 I reported on One World’s shoddy book keeping as exposed by the NFA. I closed that post with this prediction: “In short, One World is a classic Dead Forex Firm walking. Firms like One World are the reason the NFA is going to raise capital requirements. And when they do, does anyone honestly believe the One World's of the world will survive?”
Forex Forum - FXstreet.com - View Single Post - NFA Forex Dealer Dead Pool

In August I did a follow up report titled “One World Forex with One Foot in the Grave” detailing the many complaints traders were making about One World Capital, in particular the problem customers were having withdrawing funds. These reports coincided with information I was being fed that One World was in dire straits and that their sales staff had resigned en masse.
Forex Forum - FXstreet.com - View Single Post - NFA Forex Dealer Dead Pool

In September the news grew worse as customers confirmed to me they were having great difficulty getting money out.
Forex Forum - FXstreet.com - View Single Post - NFA Forex Dealer Dead Pool

Finally, the firm slipped beneath the waves in December just as the new capital requirements were kicking in.
Forex Forum - FXstreet.com - View Single Post - NFA Forex Dealer Dead Pool

The final death blow came on December 13th after the CFTC raided the joint and put them out of business for good.
Forex Forum - FXstreet.com - View Single Post - NFA Forex Dealer Dead Pool
Forex Forum - FXstreet.com - View Single Post - NFA Forex Dealer Dead Pool

2) The Forward Forex Follies
Of the many firms that went belly up in 07’ perhaps known was more humorous to observe than NFA member Forward Forex. These two posts are must reads. Upon having the NFA enter his company’s office the CEO of the firm, Onelio Manuel Murias, fled the premises likes a scalded hound. The firm was shut down shortly after.
Forex Forum - FXstreet.com - View Single Post - NFA Forex Dealer Dead Pool

Digging through wreckage of the firm one finds a whole cast of crazy characters right out of One Flew Over the Cuckoo’s Nest. Here is a typical day in the life of a Forward Forex salesman:
Forex Forum - FXstreet.com - View Single Post - NFA Forex Dealer Dead Pool

“And on and on it goes. Customers are pressured into sending in their 401k money or to take out second mortgages, which are then promptly flushed down the drain in worthless options contracts. Sales agents are described as harassing, berating and screaming at customers to send in money. One "Customer Service" representative tells a distraught customer who is losing his shirt that their sales agent (who else but the notorious Blauch) can't be reached because he has "had a heart attack" and then finishes the conversation by saying "sorry, but this is the chance you took." And my personal favorite, “sales agents throwing chairs across the room in fits of rage.”

Indeed, that is the chance you take with poorly capitalized firms.

3) Strolling through Maggot Mile
This story highlighted the loathsome villainy of Worldwide Clearing, one of the many seedy bucket shops populating South Florida. I also pointed out that another NFA registered forex dealer, Nations LLC, was inhabiting the same address and made the following prediction, “Anyone want to make odds on how long it will be before Nations gets shuttered? Perhaps the folks over at Intrade can add a dead forex firms expiration date contract to their prediction market. If so, I’m going long on Nations going under. And I ain’t worried about a margin call…”
Forex Forum - FXstreet.com - View Single Post - NFA Forex Dealer Dead Pool

A week later that is exactly what happened.

4) Nations LLC Bites the Dust
The collapse of Nations was entirely predictable for anyone who did a cursory background check on them. Cause of death? Undercapitalization. Pure and simple.

Forex Forum - FXstreet.com - View Single Post - NFA Forex Dealer Dead Pool
Forex Forum - FXstreet.com - View Single Post - NFA Forex Dealer Dead Pool
Forex Forum - FXstreet.com - View Single Post - NFA Forex Dealer Dead Pool
Forex Forum - FXstreet.com - View Single Post - NFA Forex Dealer Dead Pool

5) Underwater Udo
This self described “scuba rogue” was sent to the clink for using customer funds to buy himself cars put his wife through school and go deep sea diving all the while sending his customers statements telling them they were making a killing when in reality he was spending their money to fund his own lavish lifestyle.
Forex Forum - FXstreet.com - View Single Post - NFA Forex Dealer Dead Pool

6) Switzerland’s Swiss Cheese Regulation
Meanwhile in Switzerland gangs of scheming thieves were wreaking havoc in what had become the most notorious forex backwater on earth. I was quick to expose the lie put forth by Swiss forex dealers that their membership in anti-money laundering associations like ARIF was regulation comparable with the FSA or NFA for example.
Forex Forum - FXstreet.com - View Single Post - NFA Forex Dealer Dead Pool

Following that came some muckraking stories on Tradex Swiss AG. The Tradex story made national headlines as well.
Forex Forum - FXstreet.com - View Single Post - NFA Forex Dealer Dead Pool
Forex Forum - FXstreet.com - View Single Post - NFA Forex Dealer Dead Pool
Forex Forum - FXstreet.com - View Single Post - NFA Forex Dealer Dead Pool

Following the Tradex debacle Swiss authorities had to shut down another bucket shop, Aleccoh FX, which was being run by some shady character at the Forex TSD bulletin board who hides behind a George Soros avatar.
Forex Forum - FXstreet.com - View Single Post - NFA Forex Dealer Dead Pool
Forex Forum - FXstreet.com - View Single Post - NFA Forex Dealer Dead Pool

Finally, the stench of Switzerland’s rotting forex broker dealer corpses became so pungent the Government stepped in and demanded everyone get a banking license pronto: Forex Forum - FXstreet.com - View Single Post - NFA Forex Dealer Dead Pool

Coming Tomorrow- Part II of the Scholar’s Greatest Hits

 

[Fantasy Trader]

the misdeeds and misadventures of the undercapitalized and the criminally minded


Nice phrase..
Continues to be the most fascinating thread.

 

[forex scholar]

the misdeeds and misadventures of the undercapitalized and the criminally minded


Nice phrase..
Continues to be the most fascinating thread.

then you'll enjoy volume II

 

[forex scholar]

The Scholar's Greatest Hits- Volume II

You didn’t think the Scholar would forget such criminal masterminds as Robert Gray or overlook the smooth talking shysters hustling and bamboozling the public at places such as Easy Forex or FX Open did you? On with the show…

1) Forex *******’s Babe Bound for Big House
The sordid tale of Forex ******* (aka Dmitri Chavkerov) and his mistress from Russia captivated the forex world after it was learned she actually got her golden ticket to America in a sham marriage that the ******* himself presided over!
Forex Forum - FXstreet.com - View Single Post - NFA Forex Dealer Dead Pool

2) Dirty Rotten Scoundrel
The collapse of Forex Liquidity is perhaps the greatest con job ever committed in retail forex. It involved the forging of a fake bond valued at almost $40 million. This fake bond was used by FXLQ to fulfill their net capital requirement and for months they got away with it. Eventually the hoax was uncovered and FXLQ was shuttered by regulators and forced into bankruptcy:
Forex Forum - FXstreet.com - View Single Post - NFA Forex Dealer Dead Pool
Forex Forum - FXstreet.com - View Single Post - NFA Forex Dealer Dead Pool
Forex Forum - FXstreet.com - View Single Post - NFA Forex Dealer Dead Pool

But digging deeper one finds that Robert Gray has a long history of malfeasance in the forex industry.
Forex Forum - FXstreet.com - View Single Post - NFA Forex Dealer Dead Pool
Forex Forum - FXstreet.com - View Single Post - NFA Forex Dealer Dead Pool

He has worked at over a half dozen different forex dealers just in this decade alone hopping from firm to firm (sometimes stealing the previous firm’s clients on his way out the door) always hustling, always scheming. Today Gray finds himself in deep legal manure but he’ll get no help from the forex community that has come to loathe him as this Irish ballad can attest to:

I read at one of these links that Robert Gray has an Irish passport and that if things ever get too rough he can always hop on Aer Lingus and live out his days shepherding sheep on a quiet farm outside Galway. Well, should that day come I'm sure the forex trading community will sing in unison:

Oh Robbie Boy, the pipes, the pipes are calling
From glen to glen, and down the mountainside.
The summer's gone, and all the flowers are dying.
'Tis you, 'tis you must go and we gladly say goodbye.

But come ye not back when summer's in the meadow
Or when the valley's hushed and white with snow,
'Tis we'll dread you be there in sunshine or in shadow.
Oh Robbie Boy, Oh Robbie Boy, we loathe you so...

3) The Running Man
These posts detailed the antics of Mr. Ryan Nettles who cut a Genghis Khan like swath through the forex industry. His war with Craig Karlis of Tradex Swiss AG fame became grist for the forex tabloids. He then treated the NFA with equal contempt when another one of his firms (Tradeco) went down the toilet in the summer of 2007. Last he was heard hawking his Weekend at Bernie’s like dead corpse of a company, Finex, to the poor sods at Varengold. Someone sign this man up for the 400 meter relay at the Olympics!
Forex Forum - FXstreet.com - View Single Post - NFA Forex Dealer Dead Pool
Forex Forum - FXstreet.com - View Single Post - NFA Forex Dealer Dead Pool

4) Metatrader Misery
“What happens when a business deal goes bad? You get bitterness, recriminations, machinations and vows to get even. This appears to be what happened after Poltek FX and FX Open parted company.”

Such is the opening to two investigative pieces I did on the broker war between Poltek FX and FX Open. This bloody civil war spilled over into numerous bulletin boards as each side released damaging information about the other in an attempt to discredit one another. In the end they both wound up deeply discredited themselves.

These posts also detailed how risky some of these small metatrader brokers are. There isn’t a shred of transparency with these firms and it is impossible to do any kind of background check on them because they are not regulated and won’t even tell you where they are based or who owns the company. It is a leap into the dark that too many traders have been eager to take.
Forex Forum - FXstreet.com - View Single Post - NFA Forex Dealer Dead Pool
Forex Forum - FXstreet.com - View Single Post - NFA Forex Dealer Dead Pool

5) Shark Hunting in the Caribbean
This post told the story of Mitch Vazquez and the gang at GCI who were closed down by the CFTC in 2002 only to emerge from the ocean like Jaws himself and start circling the waters off the coast of Belize, in defiance of the very court settlement Vazquez had apparently agreed to. Oh by the way this deadly man-eating squalus is also known to inhabit the lakes of Switzerland in the guise of Forex.CH. Swimmers beware.
Forex Forum - FXstreet.com - View Single Post - NFA Forex Dealer Dead Pool

6) Easy Forex Exposed
Back in November of 2007 the Israeli media was running stories on the sales practices of Easy Forex. Quoted in one report was an Easy Forex solicitor who said “I had this evil grin on my face one day, when a client lost $35,000 in a quarter of an hour. A guy gets wiped out - I get my commission. A guy comes up a winner and turns a profit - I pay."
Forex Forum - FXstreet.com - View Single Post - NFA Forex Dealer Dead Pool

A lawsuit is pending in an Israeli court but when television crews are quoting former salesmen taking glee in their clients losing their shirts the trading public shouldn’t be too worried regarding the judge’s ruling. Stay away from these guys!

Last month some ex-traders put even more heat on Easy Forex claiming all sorts of irregularities including tales about Easy Forex’s “Net Deposit Method.” A must read for anyone concerned about the dealing and sales methods of market makers.
Forex Forum - FXstreet.com - View Single Post - NFA Forex Dealer Dead Pool


Two Volumes down, with more to come I’m sure. There is still a lot of mucking out to do in the FX Barnyard and there is still a lot of time to pass until the CFTC comes out with its new rules. In short, there is still much to be written. And so it shall be.

 

[forex scholar]

Breaking News: NFA Hits I Trade FX with anti-Money Laundering Charges

The NFA has just blown the lid off I Trade FX’s finances. I Trade FX has had a wild financial history going from $6,500,000 in adjusted net capital in March of 2007 to
$-3,000,000 in April of 2007 then up to an astonishing $34,000,000 by December of that same year. Last month the firm took a huge net capital drop down to $16,000,000. Who knows what it will be next month. But judging from this just released NFA BCC action against the firm we are beginning to get an inkling why the firm’s numbers are all over the place:

BASIC Case Summary

First the NFA reveals this juicy little tidbit about I Trade FX’s customer base:

…the firm had approximately $10 million in customer liabilities and approximately 3,000 active customer accounts, though only nine of these accounts had more than $50,000 in equity.

For a firm that saw its net capital grow from a little over $1,000,000 in 2007 to $34,000,000 by the end of the year that is a TINY customer base. Only 3,000 accounts? Only NINE accounts with equity of over 50k? The firm is barely doing any business. So how did their capital figure grow to such a huge amount?

Answer per the NFA: David Smith

Who is David Smith? Well he is famous in Jamaica for starting a couple currency trading clubs (Olint Corporation & TCI FX Traders) that racked up huge profits. Only problem for Mr. Smith was that he neglected to register with Jamaican authorities and in 2006 they swooped in and raided his place of business seizing everything in sight. The raid was upheld by the Jamaican Supreme Court last year. The Government has yet to charge Smith with any crime and in the meantime he has shuffled on over to the Turks and Caicos Islands to await the outcome of the investigation: David Smith on the business of currencies trading - JAMAICAOBSERVER.COM

But while he was awaiting his fate in Turks and Caicos he continued to operate his Olint and TCI accounts at I Trade FX. And this is what has so concerned the NFA.

In 2007. when NFA got wind of the Cease and Desist order against Smith they asked I Trade FX to turn over Smith’s bank records since he was a principal in the firm. I Trade FX could not get Smith to comply and so they dumped him as a principal. But the NFA didn’t let the matter die there. They began digging through Smith’s trading activity at I Trade FX (particularly his Olint and TCI accounts). Examples of Smith’s activity cited by NFA included:

…NFA reviewed the activity in an account Olint opened with I-Trade in September 2006. The Olint account opening documents indicated Smith and his wife owned Olint and that the funds in the account came from them only. During the first two months this account was open, no trading activity occurred; however, during this time, Olint made four deposits totaling approximately $59 million and eight withdrawals totaling about $35.5 million.

Several more examples like this are cited in the NFA report including this one:

Between August 2006 to May 2007, Olint and TCI deposited almost $100 million into its trading accounts at I-Trade, but only a small percentage of these funds were used for trading purposes. By May 2007, Olint and TCI had withdrawn the vast majority of the funds from its I-Trade accounts. However, approximately $50 million of the funds which Olint and TCI withdrew were sent to JIJ Investments, a company owned by Martinez and his brother and father, Jacob and Jared Martinez (owners of I Trade FX).

What the NFA is charging I Trade FX with is failure to notify NFA of suspicious activities, not money laundering itself. But it does raise very troubling question about the people I Trade FX is associating with.

I Trade FX responded in a radio interview in which they directly contradicted some of the NFA’s charges (Smith was only a minority shareholder according to I Trade FX.) But in one eye popping segment of the interview David Smith and I Trade are busted by the interviewer on the question of “why wouldn’t David Smith give the NFA his bank records?” I Trade FX claimed Smith’s lawyers felt NFA had no jurisdiction to ask for Smith’s bank records and so Smith declined. Ten minutes later David Smith gets on the phone and states the NFA never asked him for his bank records and that I Trade gave NFA that response because Mr. Smith needed more time to put his records in order. Smith quickly back tracks when he gets called out on his original answer and in general gave a less than stellar performance. This radio interview was just conducted at nationwidenewsnetwork.com and is a must listen:
dsm interview_provider investforlife

This is big news in Jamaica even if most people in the United States have no idea who David Smith and I Trade FX are. At the end of the interview the interviewer asks David Smith why customers of Olint aren’t getting paid their monthly returns. Smith has no answer and after an agonizingly long pause throws out that his “brokers” won’t give him the funds and he doesn’t know why. The credibility of David Smith crumbles by the hour and his constant references to himself in the third person in this interview only damage him further.

It may be that we have only touched the tip of the iceberg with this story so stay tuned as this investigation moves forward.

 

[forex scholar]

David Smith: Messiah or Huckster?

Google “David Smith” and “forex” and you come up with hundreds of results. The man is the George Soros of Jamaica and reading through some of the material on him either you love him or you hate him.

On the Internet you can find plenty of testimonials from customers who back up his claims that his trading club “Olin” was routinely getting 10% monthly returns. But I give you this blog post from “All Messed Up – My Life” to give you a front row seat at a David Smith love fest: All Messed Up - My life, My work, My Jamaica

David Smith is a Celebrity
I went to a Forex Expo over the weekend. It was the first of its kind that I’d ever seen put on in Jamaica, and since I have been dabbling in FX trading for the past 2 months or so I decided to go.

The first three sessions of the expo were very good and I picked up quite a few pointers that I could see being immediately useful. In the last two sessions however I lost interest slightly as the presenters (MTI and I-TradeFX) began to shamelessly promote their own services, which in all honesty was to be expected, I stuck around nevertheless as I was hell bent on winning one of the gate prizes. Though I won nothing I did find something extremely interesting, almost everytime time Jared Martinez said the name David Smith there was a loud round of applause in the auditorium. I said to myself, “this man is a frigging celebrity!”, and its really not hard to understand why.

This man has, almost single-handedly, started to revolutionize the landscape of the financial sector in this country. For years we were stuck with getting returns of 4-5% per YEAR on whatever money we placed in the various banks. We knew it was meager, but we pretty much took it for granted that that was the way it had to be. Then came along David Smith, a man with years of experience in FX trading who formed an ‘investment club’ called OLINT and started giving his members 10% return per MONTH on their investment. Yes, you checked that right, that’s 120% per year. A year or two ago the government cracked down on his operation, stating that he was putting people’s money at risk and that he was not licensed to do what he was doing. The government’s argument was load of crock, but that is what happens when people are ignorant and choose to fight against what t
hey do not understand instead of learning more about it.
Nevertheless I don’t think the actions of the government were based on their care and concern for the people of Jamaica. These new investment clubs were causing an upset. They were ’showing up’ the financial institutions who were giving us cents on the dollar (if so much) from the fruits of our investments. The heads of these institutions continually rub shoulders with the decision makers of this country….I am sure you see where I am going.
Screw the PNP AND the JLP. I say David Smith for President!!!
(I’m kidding about that last bit, but the party in power should really take some advice from that man).

Such is the effect that Smith has on his followers. Indeed, below this blog post there are over 100 comments, many of them like this:

I have been a member of Olint going on 3 yrs. David Smith’s Olint is God sent to us.
I have met David, he is a brilliant young man whom unselfishly has used his talent to help us ordinary Jamaicans. There is not one member who is unsatisfied with their returns as most if not all have gotten back their principle. Olint has been contributing factor to the development of Jamaica and its people. There is nothing negative you can say to sway us - as the proof is in our pockets. GOD BLESS DAVID SMITH, HIS FAMILY AND THE OLINT MEMBERS
Olinter

So what got Olinter so riled up? Well, many of the people commenting claimed that Smith is merely operating a Ponzi scheme. In fact, the International Monetary Fund recommended that Jamaica close all its unregulated investment schemes due to the concern many bankers have about ponzi schemes in Jamaica.
Close unregulated investment schemes, warns IMF - JAMAICAOBSERVER.COM

This article that came out last week in the Jamaica Observer states there are 35 such known schemes in operation on the island today and that their collapse could wreak havoc on the island reminiscent of the Albanian Ponzi Scheme revolution of 1997:
1997 rebellion in Albania - Wikipedia, the free encyclopedia

In fact, one major investment scheme has already been exposed in Jamaica, Cash Plus.
Cash Plus drama ...Carlos Hill and co-accused charged with fraud - JAMAICAOBSERVER.COM

Only time will tell if David Smith’s Olint is a Ponzi scheme too. And if it is it could have far reaching consequences well outside the happy confines of Jamaica.

 

[forex scholar]

NFA Not Targeting David Smith

The NFA has come out and clarified that it is not investigating any of the transactions in question by Olint or TCI. They are merely citing I Trade FX for not filing any anti-money laundering notices in regards to the transactions in question. Jamaican media is all over this one: Radiojamaica.com... today's news... today | Nfa, Itrade, Complaint, Activity, Should | Olint and TCI not apart of US investigation - The US securities watchdog company, "National F...

Olint and TCI Not Part of Investigation

The US securities watchdog company, "National Futures Association" (NFA) says local investment clubs Olint and TCI are not part of its investigation into foreign exchange trader, I-Trade.

Last week it emerged that a complaint had been filed with the NFA about a failure to report suspicious transactions involving foreign exchange trading.

Director of Communication at the NFA Larry Dykeman told RJR News that its investigations do not involve the local companies.

Last week the independent investigators NFA commenced investigations into a complaint about I-trade, a foreign exchange dealer which had Olint's David Smith as one of its principals.

Mr. Smith withdrew as a principal of I-Trade at the end of December last year.

Mr. Dykeman said the complaint arose because I-Trade did not supervise their complaint officer who should have raised an alarm about some of the account activity.

"What we are saying in this complaint is that, I-Trade as a member of NFA had an anti-money laundering programme in place that should have triggered them when they saw this account activity on behalf of Olint and TCI, they should have filed a suspicious activity report to the Federal government," said Mr. Dykeman.

According to the NFA there could be a logical explanation to the account activity but added that certain transactions should automatically trigger a report to the authorities.

I-trade could be fined if found guilty or the NFA could suspend its membership in the regulatory body.

The NFA's investigation into I-Trade will be completed by the end of the month.

 

[forex scholar]

How Many Forex Accounts Does David Smith Have?

David Smith is rumored to have over $1 billion in assets under management. As such he has money squirreled away all over the world. I Trade FX is just one of many brokers Smith has cash at. It is rumored that he has money at all the big FX brokers in the U.S. The folks over at investforlife.wordpress.com have been doing a great job covering the Olint story and today they printed an email from an anonymous source to Oanda asking them if they have any David Smith accounts and if so have they frozen them:
Olint, is it the broker’s fault? Real Investments For Life

Naturally, Oanda cannot comment on private customer information. But they state in their email responses that regulators can request customer accounts be frozen. Smith is stating that is why he can’t give customers their money back. Olint customers are worried that Smith is playing the slippery eel and that he is using that as an excuse for non-payment.

My hunch is that regulators are swarming all over David Smith’s accounts right now and he most likely is telling the truth. But that being said will there be enough money in all his accounts to pay back his customers? That remains to be seen…

 

[forex scholar]

Latest CFTC Net Capital Report

The new net capital numbers are out. Here is the link to access the report:
http://www.cftc.gov/stellent/groups/public/@financialdataforfcms/documents/file/fcmdata0508.pdf

The following firms have net capital below $10 million

Advanced Markets $5,017,000
Bacera $5,387,000
MG Financial $6,001,000
Forex Club $7,380,000
Hotspot $7,843,000
Friedberg Mercantile $8,167,000
CMC $8,426,000
Ikon $8,462,000
MB Trading $8,660,000
Easy Forex $8,662,000
IFX $9,141,000

In particular you will notice that three firms are far below the upcoming increase to $10 million. Advanced Markets, Bacera and Money Garden. In fact, they are struggling just to meet the current $5 million net capital requirement with Advanced Markets a scant $17,000 above the current law! That kind of capitalization does not inspire much confidence and traders really need to beware doing business with them.

The following firms have net capital below $20 million

GFS Forex $10,829,000
Alpari $11, 668,000
ODL $15,182,000
I Trade FX $15,828,000
FX Solutions $18,088,000
CMS Forex $19,306,000

The following firms have net capital above $20 million

PFG $20,275,000
Interbank FX $22,980,000
Gain Capital $44,293,000
GFT Forex $58,304,000
FXCM $70,794,000
Oanda $164,256,000

As always conduct your due diligence and make sure the firm you are trading with will be able to comply with the new law.

 

[forex scholar]

Olint on the Verge of Collapse

The situation at Olint is deteriorating rapidly as David Smith has shuttered a local office in Jamaica that he says was the subject of a bomb threat while his fund suffers an apparent bank run. In a grim letter to shareholders Olint states:
OLINT Local Offices Closed Real Investments For Life

These negative and speculative press reports have put a strain on the management of the fund and the fund has come under more and more scrutiny which has also itself been triggered by the increased encashment demands. The reckless and prejudicial use of National Futures Association (NFA) report which was not against us but only mentioned us en passant, while not providing any evidence whatsoever but speculation, caused, as if by well timed design, further pressure on the fund.

Jamaican News is keeping up with the story and Radio Jamaica states:
Radiojamaica.com... today's news... today

News of the worsening situation at OLINT comes two months after the company unveiled several changes to the way it does business with its clients which included restrictions on the frequency with which members can request payouts.

In addition, clients were told that they would face lengthy delays in getting back their funds.

David Smith is spinning hard but regardless, it appears that Olint is doomed. Again the question is will there be enough money to go around or was this a Ponzi scheme all along?

And if it was a Ponzi scheme did I Trade FX, where David Smith was once a leading principal, knowingly or unknowingly help facilitate it?

To their credit, I Trade FX has been desperately trying to shake this guy like a bad cold. But as Winston Churchill once said of Italy’s disastrous alliance with Germany during World War II, “How much easier is to join bad companions, than to shake them off…”

 

[forex scholar]

We're Mad as Hell!

And we’re not going to take this anymore! So sayeth the investors of Olint who are pouring onto the Internet in Jamaica to rage against David Smith’s Machine. Here is just a sampling: OLINT Local Offices Closed Real Investments For Life

Have you heard of people phoning-in bomb threats to an airport in order to delay their own flights (because they don’t want to miss their plane)? Same thing here, DS knew there would be a massive crowd at his local office today and phone-in the bomb threat!

it is now obvious that OLINT is a ponzi scheme. all this due diligence sh*t has been a farse from day one as when u look at the response from OANDA to the club (whoops PONZI) member it is obvious that he has lost or stolen our money. he must be sue and if necessary sent to jail. i would however he be free and pay us something if possible. LOL NEVER TRUST ANYONE WHO ASKS U TO PRAY FOR A SOLUTION aka Nationwide Interview. DAVID SMITH is a fraud and a spineless *****. Come clean if u are a man

David though u r a honest person you have made drastic errors in regards to the management of Olint. Though i know that u are honest u have caused great pains to club members bucause of your incompetence in management. You should have stick to trading alone and leave the management to person who could do the job. I know we will get paid but i think u deserve 12 lashes

Come clean Mr. Smith. stop propagating rumors, stop passing blame. plain and simple…. STOP THE LIES!

David Smith it seems that your reputation is important to you. Well sir, you no longer have anything going for you. This last email has broken the camels back. Again you speak without saying anything. YOU ARE FINISHED. Pay the people them what you can, and move on. There are people who will still give you money to trade for them in the future. MOVE ON MAN.

That about sums it up. Pay the people and move on man (of course when you say “man” be sure to pronounce man with the proper Jamaican accent.) This is yet another lesson on what can happen to you when you give your money to someone who ain’t got no license man.

 

[forex scholar]

Go-Trade Jamaica

Browsing the web I came across this article on a very unique marketing ploy that I Trade FX was using to attract clients in Jamaica last November:
David Smith’s Olint partners with iTradeFX in a US$100 giveaway to Jamaicans | Silicon Caribe

Jamaica- David Smith, the Fx Chief of Jamaica, founder of OLINT the premier foreign exchange trading investment club has lent his name to iTrade online forex trading platform with this giveaway. The fullpage, full colour newspaper advertisement and the website says: David Smith is adding US$100 of his own money to Live Forex Trading Accounts for Jamaican Residents who open with iTradeFX between November 15th and December 31st this year at gotradejamaica.com. Of course MTI Traders is all over this, they have been the dominant forex trading educator brand in Jamaica. They have from day one marketed themselves as the company that taught David Smith what he knows. So this giveaway should not be suprising.

Purely, what a powerful affiliate marketing programme !Whoever thought this up, is very intuned with the psyche of the jamaican people has a great timing, it’s very Digicel-esque this offering. The question that’s been hounding me though is this, are Jamaicans really interested in learninig to trade forex themselves or do they simply want to understand how it works, so as to legitimise, fortify their decision to become investors in forex trading investment clubs. I’m sure that for every 100 people Market Traders Institute (MTI) trains in their programme, less than 10% actually become forex traders and do so consistently.

David Smith was depositing $100 of his own money into individual I Trade FX accounts? This is highly irregular to say the least and while I have heard of plenty of companies that give signup bonuses to customers I have not heard of individuals doing this for customers.

What it indicates is that Smith was not some passive, minority shareholder in I Trade FX. It sounds like he was pretty involved in the firm judging from this promotion.

 

[forex scholar]

A Scoundrel to the End

Congratulations to the customers of FXLQ who are on the verge of being made whole, an unusually rare occurrence when a forex dealer goes bankrupt. Here is hoping some of that luck rubs off on the poor sods at Olint.

But the customers of FXLQ won’t have Rob Gray to thank, that’s for sure. At the last second Gray tried to scuttle the Receiver’s plan to have GFT and Ikon buy the customers of this formerly disgraced and dismembered firm.

Gray said “NYET!” to the sale in a formal court objection (someone please explain how Gray is able to strut around in public, and before a court no less, after faking a $35 million bond?)

The Receiver then proceeded to obliterate Gray in court in a rollicking motion filled with such goodies as this: http://www.robbevans.com/pdf/forexlqreplyreceiver01.pdf

In this case, the hearing on the Receiver’s Motion is scheduled for July 14, 2008, and thus, Gray’s Objections should have been filed on or before June 30, 2008. In utter disregard of the Local Rules, Gray waited until 6:11 p.m. on July 3, 2008, to file his Objections and supporting documentation, which totaled approximately 341 pages.

“Utter disregard” for the rules? That’s our Robbie boy!

Throughout Gray’s Objections there is an underlying theme that Gray is “offering” to turn over to the receivership estate the sum of $3,000,000 so that all the creditors’ claims can be paid in full…

The Receiver views Gray’s “offer” as nothing more than a hallow promise, as Gray is already duty bound to return these funds to the receivership estate. As is highlighted in the Receiver’s first and second reports previously filed with the Court, the Receiver believes that Gray has misappropriated between $8,000,000 to $11,000,000 of FXLQ funds…

So where is this mythological $3 million being kept hidden? You don’t happen to have a safe house in the Turks & Caicos do you Robbie boy?

Finally, Gray also objects to the Receiver’s proposed sale of the FXLQ office equipment, furniture and fixtures, under the theory that there is no reason to sell such equipment. On the contrary, the Receiver can think of no reason to keep the equipment, fixtures and inventory, as the FXLQ offices are vacant, the business operations of FXLQ have been terminated with no future prospects of an on-going operation…

Ouch. It is finally hitting Robbie boy that FXLQ is DONE. Finished. Kaput. Bereft of life it rests in peace. But he can’t let go. One can picture him clinging to the fax machine as a couple surly movers try to haul it out of the office.

But my favorite little nugget has to be this statement found in Ikon’s motion to the court:
http://www.robbevans.com/pdf/forexlqreplyikonglblmkt01.pdf

Mr. Gray never allows the facts to get in the way of a good story.

Mr. Gray proposed to immediately distribute the funds in the customer accounts through IFX Markets Inc. However, as established in the Affidavit of Paul Belogour, attached hereto as Exhibit A, no agreement between Mr. Gray and IFX Markets Inc. to distribute the funds exists.

Taking a quick look at the IFX affidavit Mr. Belogour says:

On July 3, 2008 I had a telephone conversation with Robert Gray of Forex Liquidity. The conversation was brief. Mr. Gray initiated the call and asked me if IFX Markets was interested in the assets of Forex Liquidity. I informed Mr. Gray that IFX Markets would be interested in such a transaction and would request more detailed information if it decided to proceed. I spoke with Robert Gray via telephone again on July 7, 2008 to discuss additional information. On July 9, 2008 I formally informed Robert Gray via email that IFX Markets was not interested in purchasing the assets of Forex Liquidity.

Yet there Robbie boy was telling the court on July 3rd, only a few hours after getting a vague “sure we’re interested” shrug of the shoulders from IFX , that IFX markets could be used to distribute customer funds.

Classic Gray. Just keeps on Bullsh*tting them to the end. And it certainly is the end. Oh Robbie boy the pipes, the pipes, are calling…

 

[forex scholar]

The End of Olint

The End of Olint
Yesterday the Turks and Caicos Government froze the assets of David Smith and raided his home and place of business. Armed with a search warrant from the Supreme Court the Financial Crimes Unit of the Government swooped into action, grabbing computers, files and other knick knacks as their investigation of him reaches an apparent climax. Radio Jamaica is reporting that in the end Smith could face criminal charges: Radiojamaica.com... today's news... today | Said, Have, Olint, News, Could | OLINT’s boss could face criminal charges in Turks and Caicos -   RJR News understands that Head of OLINT Limit...

Worries are growing that the collapse of Olint could have repercussions across Jamaica as the investment scheme is said to have $600 million of Jamaican money tied up in it. Good Grief. Now we are at the point where forex hucksters can crash a nation’s entire economy?

Invest for Life has the full story: Olint Assets Frozen(Story updated) Real Investments For Life

On a Separate Note: Sources are telling me that the I Trade FX “David Smith $100 Bonus” promotion last winter lasted only a few days before it got shelved. I’m being told this was the marketing department of I Trade FX run amok. I Trade FX should be releasing their official response to the NFA complaint in the next few weeks.

Stay Tuned…

 

[forex scholar]

The Olint Soap Opera Continues

“I am now indemnifying all the directors and employees as I am the only one that was aware of these activities and I am now at this stage unable to pay out and am making this proposal to you.” – David Smith, per Nationwide News.

It sure is beginning to look like Olint was a Ponzi scheme. A news report is stating that David Smith admitted the following in a leaked email obtained by Nationwide News:
olint broke provider investforlife

1. The club is broke and most likely bankrupt
2. The older investors got their money out while the newer investors are the ones “carrying the losses.” Is that not the very definition of a Ponzi scheme?
3. He overstated his rates of return to club members.
4. The collapse of the fund was due to; competition from competitors, regulatory scrutiny, shoddy bookkeeping.
5. In particular Smith is blaming the Jamaican Government for raiding his company in 2006 as that loss of his records apparently precipitated an accounting fiasco resulting in “double payments” to some members. He then states that he didn’t report these “double payments” to his customers because he was afraid of a bank run which he once again blamed the Jamaican Government for starting.
6. Smith was only trading 50% of the funds while accounting for 100%.
7. He closes stating that Olint was “not a Ponzi scheme” and to give him another year to make it all back.

But no sooner had this report been read over the airwaves than David Smith himself called in screaming that he never wrote the email and that it was bogus. Smith said, “I had not written the email. It’s absolutely not true. And if you really think about it do you think my house is that big that I had to email my own wife?”

So who is to be believed? Well, with David Smith’s credibility in tatters my gut tells me the email is legit. But who knows for certain. What is certain is that Olint is El Busto.

Still, no word of any arrests in the Turks and Caicos. The investigation goes on and there will certainly be more to come.

 

[forex scholar]

David Smith Created I Trade FX's Platform?

So says this article from the Jamaica Gleaner in December of 2007. As part of the $100 promotion that I Trade FX was offering to Jamaican customers via Jamaica Forex Broker | Jamaica FOREX | Jamaica Trade FX Online: Go-Trade Jamaica Smith is said to have “created the platform” that customers were using in this promotion, which was in fact I Trade FX’s own platform:
Jamaica Gleaner News - Olint's Smith creates new online forex trading platform - Friday | December 7, 2007

The i-Trade FX platform is accessible at GoTradeJamaica.com. The company, which is registered in Florida, describes itself as 'a market maker in the forex market.'

Smith created the platform, the Financial Gleaner was advised, to allow Jamaicans to test for themselves how trading is done and to demystify the element of how such lucrative returns are possible.

The article further states:

David Smith, principal in foreign exchange trading company Olint Corporation, is offering a platform to Jamaicans wishing to learn how to trade currency online.

Smith has offered to each person signing up to i-Trade FX, "$100 of his own money" to help kick-start live foreign exchange accounts, a press advertisement blared Wednesday.

However, each trader signing on to test their mettle must also put up $300 - essentially creating a margin account - and must sign up by December 31 to get the extra $100.
The would-be traders would be required to do a minimum of 10 'round-turn' trades per $100 deposited to their accounts, the ad said.

A round-turn trade essentially requires the trader to execute both a purchase and a sale transaction, or vice versa.

"Clients who request a withdrawal of all account funds without meeting the aforementioned requirement," the ad said, "may not withdraw the deposit giveaway amount."

The more I read about David Smith the more I see the name of I Trade FX popping up. And the more suspicious it looks for I trade…

 

[Forex Trog]

Retraction Accepted... Thank you.

I have been pressed for time and thus the Caveman Challenge has floundered as a result. But the cavemen are coming off three straight winning weeks. The Savior misunderestimated the knuckles dragging, club wielding, forex tabulating Australopithecines churning out signals over at cavemanforex.com

While only a fool would judge a signal provider favorably after checking out only a handful of trades amongst hundreds I will admit these cavemen have proved they are far superior to the monkeys who worshipped that stone slab in the opening scene from a Space Odyssey 2000.

So the Savior retracts his dis-endorsement of cavemanforex. Judge them by their numbers, not their body hair and sloped foreheads…

Retraction Accepted... Thank you.

 

[kamon]

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