NFA Dead Forex Firms Walking

[forex scholar]

Any info. on the IG group? Are they staying afloat or on the brink too ?

seem ok to me

 

[forex scholar]

Bacera Moves Off-Shore

Last week Bacera officially closed their U.S. office and are no longer servicing U.S. customers. It was always a long shot that they would be able to meet the increased capital requirement to $20 million so this closure comes as no surprise.

But they still plan on doing business outside the NFA’s purview and are accepting customers from outside the United States. Bacera has several offices in China and most of their customers are Chinese. Will this become a trend with firms that can’t meet the upcoming adjusted net capital increase?

Here are the remaining firms that are still reporting Adjusted Net Capital below $10 million. If these firms are unable to increase their adjusted net capital to $10 million by the end of the month they too will have to close up shop in the U.S. Most of them should be able to do so as some, like HotSpot, have huge parent companies with ample financial reserves. But others like MG and Forex Club are in a very tough position.

Financial Data for FCMs

MG Financial $5,545,000
Forex Club $6,709,000
Advanced Markets $6,874,000
Hotspot $7,573,000
Ikon $8,088,000
Friedberg Mercantile $8,176,000
ACM $8,395,000
Easy Forex $9,630,000

 

[tradeartist]

Well, Tradex Swiss AG isn't the only Swiss Broker out there swindling customers of their money. The CFTC just busted another Swiss firm by the name of INH-Interholding SA and its principal Joerg Heierle. The Story is below. As a reminder the following Swiss firms ARE NOT REGULATED and should be avoided:

Unregulated Swiss Brokers
WestCapFX
ACM
MIG
DukasCopy
GFX Group (Forex.CH)
Crown Forex

Hopefully this is old news and someone has corrected this blatant error long ago since this post is from 2007. ACM is regulated by the Swiss Dept of Finance. I'm not sure why the author of this post would list them as bein unregulated.

Forex regulation

 

[forex scholar]

Rosenthal Collins Buys MG Financial

The Great consolidation continues. Today RCG announced that they have bought out Money Garden:
Rosenthal Collins acquires MG Financial -- chicagotribune.com

Rosenthal Collins acquires MG Financial

By James P. Miller | Tribune staff reporter
11:34 AM CDT, October 15, 2008
Rosenthal Collins Group LLC, the Chicago futures clearing firm, said Wednesday that it has acquired New York-based MG Financial LLC, a provider of online trading services in the foreign exchange market.

The two closely held concerns didn't disclose terms of the acquisition, beyond saying that it involved "an exchange of equity interests."

Rosenthal President Maureen Downs noted that the futures brokerage and clearing company embarked late last year on a growth initiative focused on capitalizing on the growing demand for futures and options, and building its presence in offshore markets such as Europe, South America, the Middle East and Asia. "We have made great progress in the past year," the executive said, "and today's transaction with MG tekes us to a whole new level with an unparalleled futures and foreign-exchange offering throughout key Asian markets and all of these regions."

MG Financial, which was founded in 1992 and began offering online trading services in 1997, has an extensive client base in Asia, particularly among Chinese-speaking clients outside of China because of regulatory restrictions that are in force on the mainland of China, Rosenthal said; all MG traders are required to speak at least two languages fluently, Rosenthal said, and the New York firm's polyglot group of traders contains people who speak languages such as Mandarin Chinese, Japanese, Russian, Arabic, German and Spanish.

Money Garden clearly could not survive on its own judging from their latest net capital number which is barely above $5 million. Expect more such buyouts in the next 12 months as the field winnows.

 

[forex scholar]

August Net Capital Report

With the world financial system in chaos it’s never been more important to trade with a well capitalized firm. The CFTC has just released their latest net capital figures. Not a lot of changes from the last one. Only difference is that U.S. forex dealers have 30 fewer days to make it to the coming $20 million capital requirement deadline.

Financial Data for FCMs

The following firms have net capital below $10 million

MG Financial $5,393,000
Advanced Markets $6,786,000
Forex Club $7,558,000
Friedberg Mercantile $8,147,000
ACM $8,372,000
Ikon $9,544,000
Easy Forex $9,824,000
Hotspot $9,942,000

Not much change in capital for Advanced Markets, Forex Club and ACM. Swiss broker ACM still appears to be charging the proverbial machine gun nest with a butter knife. Is this firm really going to be able to put up $20 million in the coming months? Did they even know about this capital increase before they parachuted into the U.S. market? We’ll find out soon enough.

The following firms have net capital below $20 million

GFS Forex $11,451,000
MB Trading $12,767,000
ODL $14,870,000
I Trade FX $14,952,000
Alpari $15,786,000
IFX $18,623,000
FX Solutions $19,574,000

The following firms have net capital above $20 million

CMS Forex $20,199,000
PFG $21,345,000
Interbank FX $36,505,000
Gain Capital $67,906,000
GFT Forex $73,219,000
FXCM $91,840,000
Oanda $165,458,000

As always conduct your due diligence and make sure the firm you are trading with will be able to comply with the new law going into effect in the weeks and months ahead.

 

[SpecTrade]

Segregated accounts at PFG?

Hello,

Finally my first post here. I've been trading for almost 4 years, and as I'm getting more successful I'm also paying a lot of consideration to choose the right brokers.
Presently I'm with Oanda, had been with FXSolutions, tried FXCM (they're big, all-right, but IMO sorry...customer support & sales are simply uninformed and untrained, also often rude).

Now I'm thinking of opening another account to diversify, and checking the CFTC web it stunned me that PFG has separated accounts.I got this reply from them:

"Like I mentioned before we hold all customer funds in a segregated accounts, which we list the account numbers in our funding instructions."

Yup, English a bit off, but the questions I'm struggling with:

a. do they REALLY put our money in a separate account (that would require opening a bank acc. for each customer separately)
b. even if they do, according to US bankruptcy law, what exactly happens? do we get our remaining funds back or not?

Any PFG clients here?

 

[Benny Dorm]

Hi guys,

Any idea wether EURGBP will go further down?

Interesting question but probably not the right thread. You may wish to look up "wether" in the dictionary.............

Have been through the thread and might have missed it, but does anyone know the position of ATC (Avail Trading Corp -FXpro)?

 

[Benny Dorm]

Did more research and found it is an IB. Do they hold client money, or does it go to Hotspot or, indeed, somewhere else?

 

[SpecTrade]

Cftc Update

Just got it in last weekend:

" Net Capital Requirements for Forex Dealer Members

On October 22, 2008, the Commodity Futures Trading Commission approved increases to NFA's capital requirements for Forex Dealer Members (FDMs). As stated in a July 23, 2008 Notice to Members, the minimum requirement will be $10 million as of October 31, 2008, $15 million as of January 17, 2009, and $20 million as of May 16, 2009. "

 

[SHOCKER2]

Supvisor told me over phone today that "MB Trading" will meet 20mill requirement by end of this yr a long with acquiring a few other brokers that are being negotiated.

Now let see if this takes place. :clap:

 

[forex scholar]

Dead Pool Alert

The NFA has come out with a statement that reads as follows:
National Futures Association | News Center

Net Capital Requirements for Forex Dealer Members

On October 22, 2008, the Commodity Futures Trading Commission approved increases to NFA's capital requirements for Forex Dealer Members (FDMs). As stated in a July 23, 2008 Notice to Members, the minimum requirement will be $10 million as of October 31, 2008, $15 million as of January 17, 2009, and $20 million as of May 16, 2009.

The deadline to meet the new capital requirement is this Friday. The most up to date CFTC net capital statement shows the following firms with capital below the $10,000,000 requirement.

Financial Data for FCMs

MG Financial $5,393,000
Advanced Markets $6,786,000
Forex Club $7,558,000
Friedberg Mercantile $8,147,000
ACM $8,372,000
Ikon $9,544,000
Easy Forex $9,824,000
Hotspot $9,942,000

If you have an account with any of these firms contact them immediately to ensure that they will be able to comply with the new capital requirement this week. Some such as MG Financial and Hotspot have larger parent companies. But most do not. In this day and age safety of funds should be every trader’s top priority. Make sure your funds are safe.

 

[forex scholar]

Scandal at SNC

Last year forex dealer SNC Investments sold off its forex business because they were unable to meet the NFA’s $5 million capital requirement. But it appears that they stayed in business as a Futures Commission Merchant and Money Manager. They are in business no more. Let’s roll the tape from the NFA complaint…

National Futures Association | News Center

On October 29, 2008, the CFTC contacted NFA. The CFTC advised NFA that it had received a telephone call from attorney David Serepca of San Carlos California, who said that he represented an individual by the name of Chris Lee. Serepca told the CFTC that, in April 2008, Chris Lee had written a check for $500,000 to SNC Asset Management and Kenneth Lee for the purpose of investing in a fund which would trade forex. Serepca said that he and his client had met with Kenneth Lee on October 29, 2008 and were told by Kenneth Lee that Peter Son (SNC CEO) had disappeared, and that customer money was missing.

Gotta love these CEO’s who just cut and run the moment everything goes pear shaped. I can picture Peter Son now, dressed up in drag like Jefferson Davis trying to escape the Union Army after the surrender of the Confederacy. Another forex fugitive gallops off in the dead of night…

On October 29, 2008, another principal of SNC, Young Choi – who worked at SNC’s main office in New York City – advised NFA that SNC was out of business and wished to withdraw its NFA membership. In addition, NFA became aware of a newspaper article that appeared in The Korea Daily on October 29, 2008, which reported that SNC – a Korean investment firm located in California – was “closing its operations due to the global financial meltdown” and that “the partners of the firm have no power to revive the business.” The article also stated that the firm had been managing over $70 million and that “it appears many Korean investors may lose their investments in the firm.” The article reported that the main office of SNC had been closed since October 28 and that employees had been notified to no longer come to work. In addition the article reported that the “president of the firm, Peter Son, has not been reachable by many investors and that his cell phone has been off.”

Well if you mismanaged $70 million you’d probably turn your cell phone off too. Better yet you’d probably have hurled it into the East River on your way to Macy’s to get fitted for that wig and frock…

Based on the telephone call from SNC’s Young Choi advising NFA that SNC was out of business, as well as the information received attorney David Serepca, and which appeared in the Korea Daily newspaper article, on October 30, 2008, NFA auditors went to SNC’s main office at 40 Wall Street in New York City to inquire about Peter Son and his whereabouts and to determine if customer funds were missing. However, when NFA auditors arrived at SNC’s main office they found that it was closed and its doors locked. The auditors left a note on the door requesting that a representative of SNC contact NFA.

Left a note on the door? Oh brother talk about closing the barn door after the horses have bolted… What could the note have possibly said? “Uh, Hello? You think you could let us regulators know what happened to that $70 million you had under management? Hope to hear from you. Warmest Regards, NFA.”

Subsequently, NFA’s auditors were contacted by Young Choi, who agreed to meet with NFA’s auditors at SNC’s main offices at 40 Wall Street. Thereafter, NFA’s auditors did meet with Young Choi, who again indicated that SNC was out of business and that he had terminated the lease for SNC’s main office effective October 31, 2008. Young Choi also told NFA’s auditors that he first became aware of SNC Asset a few weeks ago, that he was unaware that it was involved in forex trading, and that it was this understanding that SNC Asset only invested in real estate. Young Choi further indicated that he did not know Peter Son’s whereabouts.

There is always someone that gets left holding the bag in a stick-up. And Young Choi appears to be said bagman. Left behind to clean up Peter Son’s mess poor Young Choi must be ruing the day he ever joined SNC Investments.

The implosion of SNC is yet another lesson in the perils of sending money to poorly capitalized firms. There is no way of telling how many small firms are tottering on the brink of financial ruin in the wake of the global credit crisis that has wiped out billions of dollars in wealth. As always, conduct your due diligence and beware poorly capitalized firms like the late SNC Investments.

 

[CFDplayer]

Hello,

Finally my first post here. I've been trading for almost 4 years, and as I'm getting more successful I'm also paying a lot of consideration to choose the right brokers.
Presently I'm with Oanda, had been with FXSolutions, tried FXCM (they're big, all-right, but IMO sorry...customer support & sales are simply uninformed and untrained, also often rude).

Now I'm thinking of opening another account to diversify, and checking the CFTC web it stunned me that PFG has separated accounts.I got this reply from them:

"Like I mentioned before we hold all customer funds in a segregated accounts, which we list the account numbers in our funding instructions."

Yup, English a bit off, but the questions I'm struggling with:

a. do they REALLY put our money in a separate account (that would require opening a bank acc. for each customer separately)
b. even if they do, according to US bankruptcy law, what exactly happens? do we get our remaining funds back or not?

Any PFG clients here?

The term of "Segregated account" or "Segregated fund" refer to "client's fund in custody account under broker's name on behalf of client" on when your investment type can be treated as FUTURES investor's through out a CFTC authorised futures exchanges member under US law. In the UK and US, there is no law to protect anyone who send money to a broker who is providing margin trading on forex.

Please read your term and conditions when you open a forex trading account, even with a Bank,all your funds will be legally traded as their payable debt. In the event your broker goes to "default", the money you sent to them will be put in a pool with other broker's own asset together,and you may loss everthing.

 

[CFDplayer]

Btw, the so-called Segregated account or fund is a selling trick in the US. But if you have been told by a UK FSA regulated firm about this word,you need to check the terms and conditions when you sign up as some borkers,even Bank somehow, make a exemption from "client's money rules"(defined by FSA COBS).

 

[ibex666]

cfd

Btw, the so-called Segregated account or fund is a selling trick in the US. But if you have been told by a UK FSA regulated firm about this word,you need to check the terms and conditions when you sign up as some borkers,even Bank somehow, make a exemption from "client's money rules"(defined by FSA COBS).

whats a borker??

 

[£10kLoser]

Btw, the so-called Segregated account or fund is a selling trick in the US. But if you have been told by a UK FSA regulated firm about this word,you need to check the terms and conditions when you sign up as some borkers,even Bank somehow, make a exemption from "client's money rules"(defined by FSA COBS).

Who cares? If your money is guaranteed by the FSA what does it matter if they keep your money up the nearest orifice?

 

[SpecTrade]

Hi CFDplayer,

Thank you so much for your reply.
Well, I must say that initially I was quite happy to see PFG listed as one with "Segregated Accounts".
Thanks to you I see how it works now.

So basically, any broker, be it forex, futures or whatever - if the go belly up, our money would not be fully recovered? Unless they have 2 entities I think.
I still don't understand how does that work, since most people believe that their money is "safe" when put into "separate account". This is all very confusing.

One more:
Regarding CFDs and futures - which broker would you recommend?

Thanks a lot

 

[CFDplayer]

Who cares? If your money is guaranteed by the FSA what does it matter if they keep your money up the nearest orifice?

I think you missed some points.

So far as I know, FSA itself (a limited private company guarnteed by HM Treasure's and funded by its members) does not give investor (when he/she is a FSA regulated firm's client) any protection or a guarantee about their funds while the FSCS limited does.

The cover business only for retail clients when the client's money rule applied.

And for deposite business protection,the max is 50k per person per account.
for investment business protection,the max is 48k per person per account.

More importantly, margin forex trading is NOT investment while FX options and FX fututes are recognized invesment instruments defined by the financial rule-maker FSA in its 800-page-handbook.

If you are not classfied by your broker, or even be classfied as retail investor but you opt-out from client's money rule,then no one has obligation to safeguard your margin held in the broker's account.

 

[CFDplayer]

Hi CFDplayer,

Thank you so much for your reply.
Well, I must say that initially I was quite happy to see PFG listed as one with "Segregated Accounts".
Thanks to you I see how it works now.

So basically, any broker, be it forex, futures or whatever - if the go belly up, our money would not be fully recovered? Unless they have 2 entities I think.
I still don't understand how does that work, since most people believe that their money is "safe" when put into "separate account". This is all very confusing.

One more:
Regarding CFDs and futures - which broker would you recommend?

Thanks a lot

When dealing futures contract with an exchange member based in the US and regulated by CFTC,your funds will display in the CFTC Segregated Accounts column in the monthly repport.

You can also easily find out that all forex Market Maker,such as CMC, ODL,GFT have a 0 on their balances under the segregated account column because they only run fores business and by law there is NO rule they can make client's margin as same as futures investor's funds. Believe it or not, even they physically separate the amount of client's margins from their own Net Capital in a bank, according to US GAAP, those money will be treated as company's debt as the forex investors rated as creditor on the balance sheet. That's why in the UK, FSA doesn't accept margin trading on currencies as investment.

All the terms such as Safe or Separate Account are misleading words for marketing purpose.

 

[SpecTrade]

=CFDplayer;554580]When dealing futures contract with an exchange member based in the US and regulated by CFTC,your funds will display in the CFTC Segregated Accounts column in the monthly repport.

That's why I was surprised to see some amount of PFG website.
From what I read from you, it must be due to a fact that they also deal with futures, etc.

Believe it or not, even they physically separate the amount of client's margins from their own Net Capital in a bank, according to US GAAP, those money will be treated as company's debt as the forex investors rated as creditor on the balance sheet. That's why in the UK, FSA doesn't accept margin trading on currencies as investment.

So... no matter what, in forex we're screwed.
But then, with let's say a futures' broker, we still have no guarantee of our money back in case they go bankrupt?

Thanks a lot.