When last we left off Robert Gray was busy handing over the financial records of a shady managed funds firm operating under his nose at GFS to government prosecutors. As the court document described GFS was clearing its trades through Interbank FX.
The marriage between Gray and IBFX then became fully consummated in 2005. In March of that year according to the NFA Gray applied to be a Principal with Interbank FX. No telling if he ran over to IBFX with all GFS’ clients but in any case he appears to have officially stayed at IBFX for about six months.
Unofficially? This is where things get very murky. Gray withdrew his license with IBFX on October 1, 2005 and applied for a new one with a newly created FCM, Forex Liquidity, on October 28, 2005. It was at FXLQ where Gray would cook up his piece de resistance, concocting an imaginary $35 million bond out of thin air and using that to pad FXLQ’s official adjusted net capital number.
I won’t rehash the collapse of FXLQ again but if you would like a full recap feel free to go here:
Forex Forum - FXstreet.com - View Single Post - NFA Forex Dealer Dead Pool
While Gray officially cut his ties to IBFX in 2005 there was still a business relationship between the two as evidenced by the fact that FXLQ was a prime provider of liquidity to IBFX. A debate has risen on the bulletin boards as to how dependent IBFX was on FXLQ in providing it with liquidity. In particular one dubious poster on FX Street claims IBFX for a long time was merely a white label of FXLQ and was somehow bound to Robert Gray for life:
Forex Street Weblog: InterbankFX related to FXLQ?.. I do not think so
From: Dan Campbell, Pipland, USA
Date of Post: 2007-12-05Review: I’ve been trying to warn folks for over 2 years now (read my threads below, I used to work there), but justice is finally being servered, “to some degree”. Forex Liquidity (FXLQ) is finally under investigation from the NFA. To recap: InterbankFX (IBFX) is a white label of FXLQ. Hense they are able to say “no dealing desk”. Because in fact “IBFX” does not have a dealing, but rather it’s at FXLQ where all IBFX customers clear their trades…
Sadly, as with most NFA “investigations”, nothing will be done, but this should be a hugh warning bell for everyone using IBFX. Following the bread crumbs folks…
The white label charge comes off as a bit of conspiracy mongering on the part of this Dan Campbell as IBFX continues to operate for the most part without incident even as FXLQ has been shut down. But it does beg the question how on earth did Robert Gray accrue so much influence in this industry?
Gray has been linked to numerous firms from FXDD, to Spencer Financial to Velocity FX. Google him and his name appears all over the bulletin boards like a plague bacillus. Forums - Any Recommendation for MT4 based Fx Broker
http://forexbastards.com/forum/inde...96&min=0&num=15
MoneyTec Traders Community Forum
So deep is his influence that he even pops up in China heading up another fx brokerage called MultiBank FX (great mugshot of Gary on page 7):
http://www.fxmultibank.com/pdf/brochure.pdf
And while IBFX may still be up and running their relationship with Robert Gray has cost them dearly as FXLQ owes Interbank over $10 million in frozen assets according to FXLQ’s own Receiver:
http://www.robbevans.com/pdf/forexlqreport01.pdf
It’s my hope that the new NFA Capital Requirement increase to $5 million will help weed out the Robert Grays of the FX World. Gray flourished in the weeds of the industry at small firms that never seemed to get the NFA’s attention. But with the industry reduced to 24 domestic firms and with new rules set to require all Introducing Brokers be licensed his time will have come and gone and none too soon.
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…