Are Your Funds Safe? NFA to Shut down small forex fcms

It has not been a good year for Interbank FX. First FXLQ goes down resulting in the firm losing a key liquidity provider. Then FXLQ goes into receivership taking $10 million of IBFX’s net capital with it. Now IBFX has just announced to the public that there was a major security breach and that customers who had applied for an account prior to April 2, 2007, had their personal information exposed on a rogue server accessible to anyone on the internet.
http://doj.nh.gov/consumer/pdf/interbank.pdf

To IBFX’s credit they appear to have taken immediate steps to secure the information and are offering those customers who were potentially exposed free membership to a credit monitoring company. I’m not familiar with Corporate Law but it appears IBFX hired Kirkland & Ellis to contact State Attorneys General about this? Pretty Intensive damage control by the folks at Interbank.

But considering the news has broken all over the net well outside the forex community best to cover all bases I guess: interbankfx security breach - Google Search

Let’s hope Robert Gray hasn’t been lurking around this rogue server all this time…

Fransesc Riverola is doing a top notch job at FX Street keeping traders up to date about the latest regulatory changes in Switzerland. He has sent out questionnaires to the Swim FX Broker community and several have responded, most recently Crown Forex who has stated they are applying for a banking license.
Forex Street Weblog: Open letter to FXstreet’s Swiss brokers - Crown Forex S.A response

Crown Forex�s CEO was quoted as saying:

investors must be very careful when dealing with Swiss brokers that do not see the high importance of applying for a bank license. It is important to keep in mind that many small brokers will not be able to apply or even comply with the new regulations due to the huge financial requirements this type of license incurs.

BINGO. He is dead on. This is why I started the Swiss Dealer Dead Pool. The gig is up for the schlock shops in Switzerland. Either get a banking license or in the words of Der Terminator �GET OUT!� Firms will need to have a minimum $9 million in firm capital and meet a whole variety of accounting requirements in order to get a banking license.

The CEO of Crown Forex closed his remarks by saying:

As a result in the regulatory ordinances in Switzerland, very few Swiss brokers will remain in the game, if I may say so, by the end of 2009. Probably only 5 or 6 brokers will survive out of all the brokers, whether medium or small.

Here an updated Dead Pool for the trading public.

Firms that claim they are applying for a banking license

  1. ACM
  2. Fibo Group
  3. Crown Forex
  4. DukasCopy
  5. MIGfx
  6. GFX Group (forex.ch)

Firms that are fleeing Swiss Regulation

  1. Masterforex. Their business office is listed in Switzerland but they are registered in the Seychelles and have stated they do not need to get a banking license.
  2. forex-swiss. FXCH, despite the fact they are NAMED “Forex Swiss” claim registration in Dominica. This is an odd company that has claimed multiple office addresses over the years including, Switzerland, Austria, South Africa, Iran, and the United States. Today they are claiming they have offices in Dominica and the United Kingdom. Tomorrow who knows, they could claim a mailing address in Tibet. Beware this firm.
  3. Prime4X. Their head office is in Switzerland but they have stated they are applying for a license in Cyprus.

Firms that are no longer accepting customers or have been shutdown

  1. WestCapFX
  2. Tradex Swiss AG
  3. Finex
  4. Aleccohfx

Firms that refuse to comment

  1. Swiss Direkt
  2. Tadawulfx
  3. Advised Trading

As always conduct your due diligence and make sure the firm you trade with is regulated and legit.

With all these bogus claims from small time brokers claiming they are regulated because they hold a �certificate� they managed to pull out of a cereal box it is hard to know what to believe these days when a firm states they are �licensed.�

And perhaps no firm straddles the line between licensed and unregulated more than a firm by the name of GCI Financial. A reader asked me to provide some background on GCI recently and after doing a quick Internet search I found myself once again swimming in the deepest, darkest, murkiest depths of the Forex Ocean in search of that most dangerous dorsal finned predator of all- the offshore FX boiler-room.

GCI appears to have been started back in the 1990�s and used to be a U.S. based company with its CEO, Mitch Vasquez, living in Wilton, CT. It didn�t take too many clicks of the mouse to discover that GCI had been busted by the CFTC under the headline �CFTC CRACKS DOWN ON FOREIGN CURRENCY SCAMS NATIONWIDE.�
CFTC Press Release 4611-02

The complaint itself charged GCI for violating the Commodity Exchange Act. In short, the CFTC was taking GCI to court because they had not registered with the NFA (Hello FXDD! This could someday happen to you!)

Also cited in this lawsuit was Vazquez. In 2002, Vazquez and GCI settled the suit and as part of the settlement Vazquez paid a $100,000 fine and agreed to

�for a period of three years, not to act in any capacity or affiliate in any way with any individual or entity which involves the solicitation, acceptance of orders, transmissions of orders, execution, advice related to, pooling of funds, or recommendation for or of futures contracts, options on futures contracts, or options on foreign currency either (i) for or on behalf of any U.S. citizen or U.S. resident, regardless of where cleared or conducted; or (ii) that are cleared or conducted in the U.S., whether on or off-exchange, regardless of the citizenship or residency of the parties.

Sounds pretty clear to me. Basically, Vazquez and GCI were expected to close their doors and get out of the FX business.

But apparently GCI didn�t see it that way. Instead, they submerged beneath the water and headed to Belize. Well at least their �State of the Art� dealing room fled to Belize. But Vazquez doesn�t appear to have gone anywhere as a FEC filing showed he contributed $2000 to George Bush�s Presidential Campaign in 2004 where he listed an address in New Canaan, CT.
MITCHELL VAZQUEZ Donations – Huffington Post

Meanwhile in Switzerland (cue up Jaws music)�

According to the gossip on the bulletin boards Vazquez had apparently branched out into the notorious Swiss Market. Rumor has it that GCI and GFX (Forex.CH) are the same firm. This was news to me. But several people have stated that Vazquez is also a director at GFX and also points out that the websites of GCI and GFX are remarkably similar and also housed on the same servers?
Forums - GFX Group SA - anyone has experience?
GFX Group SA
GFX Group Reviews | GFX Group forex Ratings | gfxsa.com reviews and ratings by Forex Peace Army

Also, it appears that GFX has recently gotten into some trouble with the Swiss Government according to one trader who cited this (translation welcome if anyone speaks Francais):
Renseignements internet du Registre du Commerce

As for GCI, it claims registration in Belize and you can actually verify they are in fact licensed by the regulatory authorities there:
ABOUT IFSC - International Financial Services Commission

Strangely, GCI doesn�t provide this link on their website which would allow traders to verify this independently which I just did as the Savior is nothing if not fair and balanced.

The reason GCI may be quiet about their regulatory status with Belize officials is because the IFSC does not actually do much aside from collect fees and provide �guidelines� to businesses. In fact, they state on their own website:
ABOUT IFSC - International Financial Services Commission

�The Commission relies on self-regulation, meaning that while government sets overall standards, it expects much of the actual work in terms of monitoring and compliance to be done by the industry itself.�

Bwahahaha! As if a forex firm that has been driven out of the United States for being a �scam� is going to properly �self-regulate� itself. This tells you about all you need to know about the quality of Belize regulation.

So what should traders take from all this? Common sense would dictate that traders avoid GCI. Their compliance history is poor and their current regulators in Belize clearly don�t give a damn what they do so long as they pay their bills on time. At the end of the day GCI is just another shark in the water. Here�s hoping someone harpoons them and sends them to the bottom of the ocean from whence they can never be dredged up again.

This is going to be a post rife with Texas sized clich�s. How can it not be with a company with a name like �eToro� that has a logo with a pair of bull horns jutting out of it?

First of all who are these guys? Well they are one the newest FX brokers in the market who are taking a very novel approach to currency trading. They also have ties to the online gambling rackets as their CTO is David Ring who was a key R&D leader at Israeli-based 888.com (a major online casino and poker operator) according to this feature article that came out last fall:
eToro Makes Forex Trade Child’s Play

But this Israeli firm�s ties go much deeper than to just an Internet gambling website (and please spare me the term �gaming.�) They also have connections to none other than Shimon Peres, the President of Israel. It appears Shimon Peres� son, Chimi Peres, is one of eToro�s private investors:
Pitango Venture Capital - Nechemia (Chemi) J. Peres

So how is eToro standing out in the marketplace aside from their exotic resume? Well they have created the first forex video game. You have to see the screen shots to believe them:
http://www.techcrunch.com/wp-content/etoro_match.jpg
http://www.techcrunch.com/wp-content/etoro_marathon.jpg

But aside from the cute cartoon characters inhabiting its software (which led one trader to state eToro should rename itself �eTarded�) the truth is eToro is just shoveling the same old Bull at traders. What makes me say that? Well, when I asked them if they were regulated they gave me the ol� Texas Two Step. Check out this chat transcript below:

Daniel: Welcome to eToro! How can I help you?
you: I was interested in opening a new account with you and see that you are based in Cyprus. Are you registered with the Cyprus Securities and Exchange Commission?
Daniel: of course
you: oh good. what is you Cyprus sec number?
you: i don’t see you firm listed in their database
Daniel: I’m sorry. I can only give you support regarding our platform
Daniel: for more information you can address our website
Daniel: or retailfx’s website
you: but your website says nothing about you sec license
you: what is retail fx’s website?
Daniel: Online Forex Trading Software for all online FX trading | RetailFX
Daniel: this is our worldwide broker
you: this website says nothing about your license either
you: so do you have a license or not?
Daniel: I’m not sure what you are looking for
Daniel: i can help you regarding our platform
you: Do you have a Cyprus Securities and Exchange license?
Daniel: we do have a license
you: is it a Cyprus SEC license?
you: What kind of license do you have?
Daniel: I’m sorry… I don’t know these details. I can only give support regarding our platform
you: ok do you have an email address?
you: who can I speak to about this?
Daniel: <[email protected]>
you: I just want to make sure you are a legitimate company
you: there are a lot of scammers in fx
Daniel: we are totally legit
Daniel: you can check with IFX
you: who?
Daniel: and the NFA
you: nfa?
you: you have an nfa license?
Daniel: IFX…our US broker
Daniel: we are regulated by the NFA
you: eToro has a nfa license?
Daniel: would you please send us an organized email with all of your questions?

eToro is an Israeli company with a Cyprus address and a British Virgin Islands Registration. Now what kind of business arrangement is that? That is about as unaccountable as you can get. When I asked their chat representative if they have a Cyprus SEC license (which they should have if they have an office in Cyprus and are soliciting customers from Cyrpus) the rep says �of course.�

When I point out that eToro is not listed as having a license at the Cyprus SEC website I�m directed to another company that supposedly has a license, retailfx.com, I find they don�t have a license either. At which point the customer service rep breaks down and blabbers about their arrangement with IFX.

Clearly eToro talks the regulatory talk but they don�t walk the regulatory walk.

So what about this link with IFX? Well it turns out that eToro can�t accept U.S. customers. Hmmm. That�s strange. Plenty of offshore forex brokers accept U.S. customers. Why not eToro? Instead, eToro has to rely on IFX who is apparently white labeling eToro�s Sony Playstation, er, forex trading software.

It�s pretty obvious why eToro can�t accept U.S. customers. It�s because they are nothing more than a gambling shop and online casinos outside the U.S. are not allowed to accept U.S. customers. eToro�s lawyers are obviously worried that Uncle Sam will come after them with a vengeance if they start soliciting customers (not to mention the MGM Grand, Powerball, Pat Robertson, Ralph Reed and Mike Huckabee.)

What does that tell you about the kind of dealing desk these guys are running? The firm is a straight up casino- they only make money if you lose money. It is market making on anabolic horse steroids. In short, it is every currency trader�s worst nightmare come true.

By the way I sent eToro an email asking for clarification on their regulation. Of course there was no reply. Lord somebody fence these guys in�

Here are the latest adjusted net capital figuress for U.S. based forex brokers:
www.cftc.gov/stellent/groups/public/@financialdataforfcms/documents/file/fcmdata0308.pdf

Above $20 Million
Oanda $163,000,000
FXCM $87,000,000
GFT Forex $76,000,000
Gain Capital $73,000,000
Interbank FX $28,000,000
I Trade FX $27,000,000

Below $20 Million
PFG $19,000,000
FX Solutions $17,000,000
ODL $14,700,000
CMS $13,900,000
GFS Forex $11,000,000
IFX $10,600,000
Ikon $8,800,000
Alpari $8,800,000
CMC $8,300,000
Friedberg Mercantile $8,000,000
Forex Club $7,900,000
Hotspot $7,700,000
MB Trading $7,700,000
Easy Forex $7,200,000
Money Garden $6,600,000
Bacera $5,500,000
Advanced Markets $5,100,000

Six weeks ago I reported on the danger of trading with FXDD because they were the only forex firm in the United States that had neglected to get a license from the NFA.
http://forums.babypips.com/42532-post210.html

Well it appears FXDD took my criticism to heart.

FXDD Announces Pending NFA Approval

NEW YORK, NY May 7, 2008 � FXDD, a global leader in online foreign exchange trading, today announced its applications for becoming a National Futures Association (NFA) member and for registration as a Futures Commission Merchant (FCM) with the CFTC are pending approval. Clients may follow FXDD progress through the registration process by logging on to the NFA�s website (National Futures Association - NFA is a regulatory service provider for the derivatives markets) and searching the BASIC system under its NFA ID number 0397435.

�The pending reauthorization legislation for the CFTC will fill the gaps left by previous legislation and narrow the playing field for entities in the Forex space. The value of companies as registered entities and non-registered entities is driven by many factors; registration is certainly one of those factors,� commented James E. Green, FXDD�s chief legal counsel. �FXDD is always interested in increasing its business under the appropriate circumstances by providing professional service and promoting certainty and clarity as to the government and private agencies responsible for regulating Forex dealers.�

All I can say is, it’s about time! Count that as another victory for retail forex traders. The Savior’s work goes on…

The big news this week is the farm bill which is close to passing the House and Senate. Inside that farm bill are provisions that would require U.S. forex dealers to have a minimum adjusted net capital of $20 million in addition to requirements that all introducing brokers be registered with the CFTC.

The big question is if Bush vetoes the bill will the Congress have enough votes to override his veto? According to this story the override vote will be a very close one:
Farm bill conferees lambaste press, administration

Chambliss, a Republican, has promised to try to override a White House veto. With other Republicans also taking such a stand, does President Bush have the votes to sustain a veto? It will be �very close� said Ed Schaefer, USDA secretary, during a May 9 press conference. Schaefer then played the populist and tied subsidy levels to U.S. families having trouble paying rising food prices. If politicians listen to such families �then we�re going to sustain the veto.�

Of course, the forex provisions are a sideshow in this fight, which has become a fight primarily over farm subsidies. The $20 million capital requirement has been agreed upon by the powers that be. So now the question is not if, but when. A veto override means this capital requirement will be enforced by the end of the year for sure.

Developing�

According to Republican Senator Charles Grassley the Congress will have the votes to override a Bush veto of the farm bill.
CongressDaily - Grassley: Congress Has Votes To Override A Farm Bill Veto

Senate Finance ranking member Charles Grassley said today he has signed the farm bill conference report and will work to override a likely presidential veto, predicting that both chambers have enough support for an override. Grassley told Iowa reporters in his weekly teleconference that he is disappointed by the payment limitation provisions in the bill, but said they are better than current law. He also praised the bill’s “long list” of other changes, including farm program and tax provisions that he wants enacted. Grassley expects the White House will not push Republicans to sustain the expected veto. If Bush does push support for the veto, cautioned Grassley, he should expect “very weak loyalty in the Congress from his own party.”

It looks more and more like this bill is going to become law. I�m trying to dig up the actual language of the bill to find out the time frames the industry is going to get in order to comply with the law. I�ll have more tomorrow.

House passes election-year farm bill
By MARY CLARE JALONICK � 1 hour ago

WASHINGTON (AP) � The House passed a $290 billion farm bill Wednesday with a strong veto-proof majority, offering more subsidies for farmers, food stamps for the poor and special projects that lawmakers can bring home to voters this election year.

The 318-106 vote for the five-year bill came despite President Bush’s promised veto. He says the measure is too expensive and gives too much money to wealthy farmers.

About two-thirds of the bill would pay for nutrition programs such as food stamps and emergency food aid for the needy. An additional $40 billion is for farm subsidies while almost $30 billion would go to farmers to idle their land and to other environmental programs.

Senators planned to begin debating the bill later Wednesday. A rejection of a Bush veto may be even easier in the Senate, where farm states have greater representation than they do in the House. Congress has only overridden one veto, on a water projects bill, during Bush’s two terms.

This measure is not perfect, said the chairman of the House Agriculture Committee, who believes it is balanced. “We’ve put a bill together that I think addresses what people are concerned about in this country,” said Rep. Collin Peterson, D-Minn.

Republicans, however, criticized the mostly bipartisan and popular bill because home-state projects added in an election year. The bill includes tax breaks for Kentucky racehorse owners, extra help for farmers in Hawaii and Alaska, and dollars for salmon fishermen in the Pacific Northwest.

“This bill has been under consideration for a long, long time, and yet still we have earmarks that have been ‘air dropped’ into the legislation,” said Rep. Jeff Flake, R-Ariz.

Ahead of the House veto, Bush made his objections clear, noting that married farmers who make up to $1.5 million still could collect subsidies under the new farm bill. “I believe doing so at a time of record farm income is irresponsible and jeopardizes America’s support for necessary farm programs,” Bush said.

Cue up the Michael Myers Halloween Theme�

I have just finished reading the Farm Bill language and it is clear that the Congress is not giving the industry much time to adapt to the incredible changes they are forcing upon retail forex dealers and introducing brokers.

The full language is now available at the House of Representatives website:
House Committee on Agriculture:

Title XIII (page 548) is the part of the bill that references the forex industry. Note the following language as it pertains to adjusted net capital requirements for forex dealers:

�(ii) The dollar amount that applies for purposes of this clause is-
�(I) $10,000,000, beginning 120 days after the date of the enactment of this clause;
�(II) $15,000,000, beginning 240 days after such date of enactment; and
�(III) $20,000,000, beginning 360 days after such date of enactment.

Assuming the bill passes by the end of June, that would give U.S. retail forex dealers until Halloween to increase their capital to $10 million. Then they would have until February 2009 to increase it to $15 million and then June of 2009 to reach the full $20 million. Halloween would also be the registration date for Introducing Brokers.

The bill also creates a separate registration category for Forex Dealers and gives the CFTC tremendous leeway in crafting rules governing this new financial services category. There is no telling what the CFTC might come up with (tough new Margin Requirements? Customer Funds Segregation? New Dealing Practice Rules?)

All in all the industry is in for a massive overhaul in the next 12 months. There are sure to be a lot of tricks and treats ahead. Stay Tuned.

The Farm Bill just passed the Senate in a landslide, 81-15, which is a veto proof margin. With veto proof margins in the House and Senate it is now clear that the Farm Bill is going to become law.
Senate passes $289 billion farm bill, 81-to-15 - MarketWatch

Bush is expected to veto the bill and it appears Congress is preparing to override the veto no later than Memorial Day.

In any case, this is a seminal day for the U.S. retail forex trading industry.

According to the Washington Post Bush will still veto the farm bill. However, the veto will not be sustained in Congress.
washingtonpost.com

Senate Passes Farm Bill, But Bush Still Plans Veto

President Bush will now follow the lead of the late Dwight Eisenhower by vetoing a comprehensive farm bill.

Bush, though, is no Eisenhower.

On Thursday, the Senate, by a comfortably veto-proof margin of 81 to 15, approved a farm bill that now faces a resistant White House. Bush says he will veto the five-year package, much as Eisenhower nixed a big farm bill in April 1956.

Eisenhower won his showdown, the last time a president vetoed a major, standalone farm bill. Bush, however, will lose. The House and Senate now have both approved the farm bill by more than the two-thirds vote needed to override a veto.

“Mr. President, you and your people have been at the table for more than a year,” Sen. Larry Craig (R-Idaho) declared. "It’s time you recognize the value of this project."
Craig was one of 35 Republican senators to abandon Bush on Thursday and support the farm bill. On Wednesday, 91 GOP House members voted for the bill, boosting the House’s approval to a veto-proof margin of 318 to 106.

Sen. John McCain (Ariz.), the Republicans’ presumptive presidential candidate, missed the vote but said he opposes the bill. Democratic Sens. Hillary Clinton (N.Y.) and Barack Obama (Ill.) both support the bill, but they likewise missed the vote.

thx for keeping us up to date.

It�s due diligence time once again. With the Farm Bill set to become law the trading public needs to start preparing for the changes just over the horizon. The following U.S. registered firms do not currently meet the first 120 day benchmark ($10 million) the Congress has recently set for Retail Forex Dealers according to the latest CFTC Net Capital Report:

http://www.cftc.gov/stellent/groups/public/@financialdataforfcms/documents/file/fcmdata0308.pdf

Advanced Markets $5,100,000
Bacera $5,500,000
Money Garden $6,600,000
Easy Forex $7,200,000
MB Trading $7,700,000
Hotspot $7,700,000
Forex Club $7,900,000
Friedberg Mercantile $8,000,000
CMC $8,300,000
Alpari $8,800,000
Ikon $8,800,000

Now obviously some of these firms can come up with the money as several have large parent companies who are loaded (CMC and Hotspot for example.) But just as past dead pool members were unable to meet the former $5,000,000 mark so too is it likely that some Autumn Equinox Pool members will be unable to meet the upcoming $10,000,000 mark which is set to go into effect at the end of September should the legislation become law before Memorial Day as expected. Which firms may fold as a result? No one can say for sure. But I certainly would not want to be a trader at Bacera, Advanced Markets or Money Garden right now.

Since the worst of the forex dregs were purged in the last dead pool the likelihood of any of these firms going belly up like One World Capital is slim. That�s the good news. The bad news is firms that know they are going out of business have a strong incentive to really screw over their customers and give them the worst execution possible as they try to grab some traveling money before they have to hit the road. This is why I�m recommending that traders avoid opening new accounts or depositing any additional funds with Advanced Markets, Bacera and MG Financial until they clearly demonstrate they can meet the new capital requirement.

I suspect the remaining firms will have enough capital to meet the $10 million requirement but traders who have accounts with these firms should be sure to speak with them and discuss the firm�s long term strategy for dealing with the full $20 million requirement. There is going to be a lot of mergers in the industry in the next twelve months and traders are likely to suffer in the chaos as customer service gets chopped up and dealing desks start really squeezing traders in their last dying days. Know in advance what you are in for and be sure to do your due diligence now more than ever.

Since starting up this thread many former forex firms are now pushing up the daisies, dead parrot style: YouTube - Dead Parrot

Indeed, these firms have passed on. They have ceased to be. They have expired and gone to meet their maker. They�re stiff. Bereft of life they rest in peace. They have kicked the bucket and joined the bleedin� choir invisible. These are ex-forex firms:

Rest in Peace
-The following firms are no longer functioning as independent registered forex dealers.

  1. United Global Markets (Died May 2007. Cause: Undercapitalization)
  2. Forward Forex (Died June 2007. Cause: Busted for Fraud)
  3. Worldwide Forex (Died June 2007. Cause: Busted for Fraud)
  4. Cal Financial Corporation (Died March 2007. Cause: Undercapitalization)
  5. Nations LLC (Died July 2007. Cause: Undercapitalization)
  6. FX Option1 Inc (Died June 2007. Cause: Busted for Fraud)
  7. Trend Commodities (Died June 2007. Cause: Undercapitalization)
  8. Performance Capital (Died June 2007. Cause: Buyout)
  9. FiniFX (Died July 2007. Cause: Undercapitalization)
  10. CFG Forex (Died February 2007. Cause: Undercapitalization)
  11. Tradex Swiss AG (Died August 2007. Cause: Busted for Fraud)
  12. Spencer Financial (Died June 2007. Cause: Undercapitalization)
  13. One World Capital (Died November 2007. Cause: Undercapitalization)
  14. ANTC (Died August 2007. Cause: Buyout)
  15. Royal Forex (Died August 2007. Cause: Buyout)
  16. Northfinance (Died May 2008. Cause: Buyout)
  17. VelocityFX (Died December 2007. Cause: Undercapitalization)
  18. Direct Forex (Died December 2007. Cause: Buyout)
  19. E-FX (Died November 2007. Cause: Undercapitalization)
  20. Solid Gold (Died December 2007. Cause: Undercapitalization)
  21. FXLQ (Died December 2007. Cause: Busted for Fraud)
  22. SNC Investments (Died December 2007. Cause: Undercapitalization)
  23. WestCap FX (Died April 2008. Cause: Autopsy not Complete)
  24. AleccohFX (Died February 2008. Cause: Busted for Fraud)
  25. Finex (Died sometime in 2007. Cause: Busted for Fraud)

That�s twenty five firms by my count that have been closed or bought out on the Savior�s watch. Thousands of traders have lost millions of dollars as a result of the chaos in the forex industry the past year and a half. Don�t allow yourself to be the next victim. Be sure to trade with a well capitalized firm and make sure they are prepared for the coming capital requirement increase to $20 million.

How come I can’t find EFX on any of these lists? Are they not capitalized?

they are a part of mb trading

While we await the President�s veto I thought I would pass along one of the funniest forex related websites I have seen in a while. It is called Caveman Forex.
Caveman Forex

The troglodyte running this website claims to be selling a winning �formula� guaranteed to make traders rich. Says Caveman Forex, �Due to the nature of the Cavemanforex formula, the success rate of these trades ranges from 60% to 70%. This ultimately gives me a profit ranging from 200 to 500 pips, sometimes more… EVERY WEEK!�

Uh huh.

And get this. He�s only selling this secret formula for $89! As Don Corleone once said to The Turk �Why do you come to me? Why do I deserve this generosity?�

I�ll tell you why, because it ain�t generosity. You�re more likely to earn money betting on Eight Belles to win the Triple Crown this year than you are trading the forex market based off signals given to you by the cast from the opening scene of 2001: A Space Odyssey.

But I give Caveman Forex points for showmanship that�s for sure!

That seems strange that MBtrading/EFX is so undercapitalized. They are one of the consistently highest rated brokers out there, so I don’t know what to take more into account, capitalization or reputation. For example, FXCM has an excellent capitalization but there are some horror stories out there about stop-hunting and trading against their customers.

Great link Forex Savior on the CFTC’s report on funds under management.

I can’t help but notice what a small amount is in the US. Even FXCM with all their advertising efforts, which in many respects I do not believe even meets the NFA’s standard concerning misleading information, has any large investors. I’m just trying to point out that they can’t have even one significantly large investor if they haven’t even broke the $100M USD level. In the U.K., FXCM would be a small company forex outfit. According to this report, it almost appears that none of these guys are all that safe.

So if the big players don’t put their money in these companies, should we?