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

[forex savior]

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.

[forex savior]

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.

[uptick]

thx for keeping us up to date.

[forex savior]

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/...cmdata0308.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.

[forex savior]

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.

[Truthy]

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

[forex savior]

Originally Posted by Truthy

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

they are a part of mb trading

[forex savior]

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!

[Truthy]

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.

[Roddy Howald]

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?