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

[nabo]

Originally Posted by forex savior

Big news people. The national futures association is going to shut down any firm that does not have at least $5 million in capital if the proposed capital requirement rule passes. This could get ugly folks. Is your firm big enough to make the cut? Most firms are poorly capitalized.

http://www.cftc.gov/files/tm/fcm/tmfcmdata0704.pdf

The rule should be decided in August. Make sure your funds are safe.

Pls Ive been planning to Start trading with Fxcast But I dont Know if they are reliable.Pls can u tell me if they are? and if They Are not Pls Can you recomend one that uses meta trader 4 ,accepts e-gold and accepts $50-$100 for mini accounnts.
Ive been searching the net for too long.It Would be so great if you could help me out .Thanks

[nabo]

Thanks for the List .
But can u provide info on FXcast. Also , this Organization that will be closing down firms does it have power over firms all over the world, or does its power cover only the United States.

[forex savior]

Originally Posted by nabo

Thanks for the List .
But can u provide info on FXcast. Also , this Organization that will be closing down firms does it have power over firms all over the world, or does its power cover only the United States.

Hi Nabo, I have never heard of FXcast. I don't think they are a U.S. based firm. You have a web address?

[nabo]

dear Forex Saviour
What about the Organization ? I mean does it have power over all firms or is it only firms in the US that will be affected cause fxcast is not from the US?
My Box is nabo_1st@yahoo.com

[forex savior]

Originally Posted by nabo

dear Forex Saviour
What about the Organization ? I mean does it have power over all firms or is it only firms in the US that will be affected cause fxcast is not from the US?
My Box is nabo_1st@yahoo.com

NFA only has power over firms registered in america

[forex savior]

According to the most up to date CFTC Report on file for Hamilton Williams (dba Velocity4x) this firm's future is in grave doubt. Hamilton Williams only has $1,100,000 in adjusted net capital. That leaves them a scant 100 grand over the required adjusted net capital requirement. How dire is the financial situation over at Velocity? Dire enough that the NFA last spring charged Hamilton Williams with a bucketful of financial violations:

BASIC Case Summary
• C.R.2-10 - RECORDKEEPING FCMS/IBS
• F.R.SEC11(b)NEW - FDM TAKE CONCENTRATION CHARGE-UNAFFILIATED
• F.R.SEC11(a)NEW - FDM MAINTAIN ADJUSTED NET CAPITAL
• F.R.SEC12NEW - SECURITY DEPOSITS FOR FOREX TRANSACTIONS WITH FOREX DEALER MEMBERS

This is pretty serious stuff. This isn't like getting slapped with a fine for failing to put an asterisk on a marketing brochure. These allegations go right to the heart of whether or not Velocity4x is even viable as a company. Here are some statements from the NFA's Complaint:

"Hamilton failed to take the applicable concentration charge on transactions with unregulated counterparties. This failure resulted in the overstatement of Hamilton's net capital by over $275,000."

"Hamilton failed to maintain the required minimum adjusted net capital as of July 31, 2006."

"Hamilton was below its minimum adjusted net capital requirement from July 31, 2006, through September 4, 2006."

"Hamilton failed to collect and maintain the required security deposits as prescribed by NFA Financial Requirements Section 12(a)"

Wow. And these guys are going to be able to come up with $10 million two months from now? (Velocity offers 100:1 leverage which means they'll need $10 million MINIMUM to stay in business.) Where is this money going to come from? What venture capitalist is going to put his money into a company that has just been charged by the NFA with a whole host of bookkeeping violations that could get it shut down? I fear the future won't be bright enough for Hamilton Williams' execs to have to wear shades.

[forex savior]

The New Cap Numbers are out! With the exception of MB Trading (now at $5,190,000) there has been no indication from the poorly capitalized firms on this list that they are shoring up their financials in preparation for the big cap increase to $5 million due in just 6 weeks. In fact one firm, Direct Forex, is reporting that they are in violation of the minimum capital requirement by $276,000!

Meanwhile, the $10 million minimum capital requirement for firms offering 100:1 leverage is proving to be a big barrier as well. How that plays out remains to be seen. But things might really get wild in the forex industry the next couple of weeks.

The following firms, according to the latest CFTC Report, do not meet the coming $5 million requirement:
http://www.cftc.gov/files/tm/fcm/fcmdata0907.pdf

Direct Forex ($762,000)
IG Financial Markets ($1,017,000)
Advanced Markets ($1,216,000)
Wall Street Derivatives ($1,231,000)
SNC Investments ($1,301,000)
One World Capital ($1,408,000)
Hamilton Williams ($1,453,000)
CMC Markets ($2,001,000)
Solid Gold Financial ($2,101,000)
GFS Futures & Forex ($3,078,000)
E FX Options ($3,752,000)
Forex Club ($3,989,000)
Easy Forex ($4,351,000)

The clock is ticking. Are your funds safe?

[forex savior]

The Ten Million Dollar Capital Requirement affects ONLY those firms that trade at a margin level of greater than 100:1

So which firms in the Dead Pool are directly affected by this? Well, not many. IG index would be affected if they actually solicited customers in the U.S. but it appears their U.S. registration is just a shell. GFS Futures & Forex offers 200:1 mini accounts on their website. Thus this rule could have a major impact on their business. But the firm that stands to lose the most is Money Garden. MG Forex is notorious for offering 400:1 "Flex" accounts and this new rule could turn the firm upside down. Here is a quick rundown after looking at each firm's website.

IG Financial Markets ($1,017,000) [700 to 1 leverage]
Advanced Markets ($1,216,000) [100 to 1 leverage]
Wall Street Derivatives ($1,231,000) [Unknown]
SNC Investments ($1,301,000) [100 to 1 leverage]
One World Capital ($1,408,000) [100 to 1 leverage]
Hamilton Williams ($1,453,000) [100 to 1 leverage]
CMC Markets ($2,001,000) [100 to 1 leverage]
Solid Gold Financial ($2,101,000) [100 to 1 leverage]
GFS Futures & Forex ($3,078,000) [200 to 1 leverage]
E FX Options ($3,752,000) [100 to 1 leverage]
Forex Club ($3,989,000) [100 to 1 leverage]
Easy Forex ($4,351,000) [50 to 1 leverage]
Money Garden ($5,507,000) [400 to 1 leverage]
Ikon ($7,562,000) [Unknown]

[forex savior]

Looks like the Savior missed this big development. Gain Capital bought out Direct Forex. So scratch them from the list. Here is the official Direct Forex Statement:

Dear Direct Forex Customer,

As you already know, Direct Forex LLC (“Direct Forex”) will be transferring the custody and clearing of all forex accounts to Gain Capital on Wednesday, August 29th 2007. Please keep in mind that it is important to liquidate any positions by the close of business, 4:00PM (CDT) on the aforementioned date. All open positions will be liquidated to facilitate the transfer of the accounts to Gain Capital.

For your convenience, we have attached a link that allows you access to Gain Capital’s two proprietary trading platforms. These platforms can be accessed through Direct Forex’ website (www.directforex.com) and by clicking on the link http://www.directforex.com/products/demo1.aspx. Please take time to familiarize yourself with these new trading platforms in order to minimize any disruption to your trading.

Please keep in mind that Gain Capital is in the process of integrating MetaTrader 4, and is confident that the system will be available on or around October 1st, 2007. Direct Forex appreciates your business and will keep you informed of any updates.

Sincerely,
Direct Forex

[forex savior]

So imagine one fine morning you wake up feeling bright and chipper. You have your morning coffee and scrambled eggs while listening to the banality of the local weather report. You look across the tv screen and see the currency rates scroll by. Hmmm, time to log into your currency trading account to see how your positions look. You are still long USD/JPY where you are taking a beating, hoping the pair will make a come back. In the meantime at least you can console yourself with the interest rate yield you’re getting.

But not anymore. Because if you’re a customer of E-FX Options you are spitting out your coffee at your computer screen right about now. Why? Because without almost any notice E-FX is closing its doors and liquidating all customer positions in two weeks.

Now had you been reading Forex Savior’s reports all along and taken him seriously you could have closed your account months ago knowing E-FX was a poorly capitalized firm that was well below the coming $5 million capital requirement. But for those poor sods stuck in positions at this doomed firm you are about to get the margin call from hell. Meanwhile, the rest of E-FX’s customers can expect the worst trade execution imaginable from a firm about to slip beneath the waves. Run Forrest, Ruuuuuuuuun!

Dear Customer,

We regret to inform you that due to the restructuring of E-FX Options, LLC (“E-FX”), that the trading platform will cease service on 30 November 2007. Arrangements are further explained as follows:

Effective 30 November 2007 at 5:00 pm US Eastern Standard Time (1 December 6:00am Peking Time), E-FX will no longer be the counterparty to customer positions and will not service customer accounts.

All open positions will be liquidated at the closing price on that day and subsequently, the account will be closed. You may also liquidate your positions at any time on or before the close of 30 November 2007 via the platform, at a price for which you find suitable.

Fund withdrawal instructions may be provided to E-FX via the trading platform or by completing the Withdrawal Form on the firm web Site http://www.efxo.com/html/download/e/withdrawal.pdf

In the event that E-FX does not receive withdrawal instructions by December 1st, we will automatically deposit the remaining balance of your funds to the bank account registered with the company in your new account application. If E-FX does not have bank instructions as of 30 November, our customer service department will contact you.

For inquiries, please do not hesitate to contact our customer service manager Joey To at the hotlines listed below.

Lastly, account statements will remain available on the trading platform through 9 December 2007.

We apologize for any inconvenience brought about by the above arrangements!

Yours truly,
E-FX Options, LLC

I like how they "apologize" for any inconvenience. These firms are so irresponsible it spins the head. This firm knew months ago they were not going to be able to make the $5 million requirement and yet they didn't make the slightest effort to warn their customers ahead of time. They just wanted to milk the cow until the very last moment. Well, the cow is being taken to the slaughterhouse and its E-FX's customers that are about to become hamburger meat.