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

forex savior · #**271** (**permalink**) 06-05-2008, 05:09 PM

There has been a lot of pissing and moaning about the new law requiring forex dealers to have $20 million in adjusted net capital to stay in business.

Yet very few of the firms now affected by the law seem to have done much to stop it or modify it. At some point you have got to take responsibility for your own business. Everyone in the industry knew about this law. Yet where were the company press releases? Where was the organized lobbying? As Bob Dole once said "where's the outrage?!"

No. Instead you could hear the crickets chirping in the forex industry. Everyone acted as if nothing was going on. The response from smaller brokers seemed to be "maybe if we're real quiet they'll leave us alone." If Washington only hears the NFA's side of the story well then that is who they are going to believe.

If you want to blame someone for the passage of this law, blame the Forex Dealer in the mirror.

"Forex Dealer In The Mirror"

I'm Gonna Make A Change
For Once In My Life
It's Gonna Feel Real Good
Gonna Make A Difference
Gonna Make It Right . . .

As I, Turn Up The Collar On
My Favourite Winter Coat
This Wind Is Blowin' My Mind
I See These Forex Dealers In The Street
With Not Enough To Capital to Meet
Who Am I, To Be Blind?
Pretending Not To See Their Needs

A Summer's Disregard
An unregulated IB shop
And A One Money Manager’s Soul
They Follow Each Other On
The Wind Ya' Know
'Cause They Got Nowhere To Go
That's Why I Want You To Know

I'm Starting With The Forex Dealer In The Mirror
I'm Asking Him To Change His Ways
And No Message Could Have Been Any Clearer
If You Wanna Make The Forex World
A More Competitive Place
Take A Look At Yourself
And Then Make A Change

(Na Na Na, Na Na Na, Na Na,
Na Nah)

Forex Dealers Been A Victim Of
A Selfish Kind of Love
It's Time That They Realize
That There Are Some with No
Adjusted Net Capital
Not A Nickel To Loan
Could It Be Really Me,
Pretending That They're Not Alone?

A Willow Deeply Scarred,
Some trader's Broken Heart
And A Washed-Out Dream

They Follow The Pattern Of
The Charts, Ya' See
Cause They Got No Place To Be
That's Why I'm Starting With Me!

Andrewunknown · #**272** (**permalink**) 06-05-2008, 05:40 PM

Sing it, MJ!

lolpie · #**273** (**permalink**) 06-06-2008, 05:22 PM

Does one anyone know firms that DO meet the capital requirements?

Andrewunknown · #**274** (**permalink**) 06-06-2008, 08:58 PM

Quote:

Originally Posted by lolpie

Does one anyone know firms that DO meet the capital requirements?

You'll find the latest data here:

Financial Data for FCMs

forex savior · #**275** (**permalink**) 06-11-2008, 03:13 PM

Week one of the Caveman Forex Challenge is in the books. Our friendly neighborhood Neanderthals gave out 12 free trades last Wednesday. It was not one of Caveman’s better weeks according to their own grid which shows them losing -5 pips overall on all their trades. However, due to risk/reward ratios and a slightly different price feed that resulted in the Savior making money on a trade the Cavemen lost on we made a $348.39 profit overall in our demo account as four trades went in our direction and four trades went in the other direction.

Tonight a new batch of trades will be published. You can find them here if you wish to play along: Wednesday's Free Forex Picks

CFTC Update: I have not heard anything yet about the new forex dealer rules. However, CFTC should be releasing their net capital report this week. Stay Tuned.

forex savior · #**276** (**permalink**) 06-11-2008, 05:52 PM

Last year Finex was investigated by the SFBC in Switzerland, however, they were not closed for fraud as was indicated in a post titled “The Dead Pool Graveyard.” It appears that Finex was bought out by Varengold FX thus bringing the investigation to a close. Details of the merger can be found here:

http://download.varengold.com/vareng...s_customer.pdf

The Savior regrets the error.

forex savior · #**277** (**permalink**) 06-12-2008, 01:45 PM

The new net capital numbers are out. These numbers are more important than ever due to the new law requiring all forex dealers have $10 million in adjusted net capital by the end of September and $20 million by May 2009. Here is the link to access the report:
http://www.cftc.gov/stellent/groups/...cmdata0408.pdf

The following firms have net capital below $10 million

Advanced Markets $5,041,000
Bacera $5,370,000
MG Financial $5,886,000
CMC $7,089,000
Forex Club $7,562,000
Easy Forex $7,741,000
Hotspot $7,783,000
Friedberg Mercantile $8,053,000
MB Trading $8,381,000
Ikon $9,418,000

In particular you will notice that three firms are far below the upcoming increase to $10 million. Advanced Markets, Bacera and Money Garden. In fact, they are struggling just to meet the current $5 million net capital requirement with Advanced Markets a scant $41,000 above the current law! That kind of capitalization does not inspire much confidence and traders really need to beware doing business with them.

The following firms have net capital below $20 million

GFS Forex $11,376,000
Alpari $11, 766,000
IFX $12,362,000
ODL $12,995,000
CMS Forex $14,085,000
I Trade FX $16,054,000
FX Solutions $17,628,000
PFG $19,369,000

The following firms have net capital above $20 million

Interbank FX $21,367,000
GFT Forex $64,288,000
Gain Capital $66,314,000
FXCM $73,603,000
Rosenthal Collins $76,571,000
Oanda $163,136,000

As always conduct your due diligence and make sure the firm you are trading with will be able to comply with the new law.

forex savior · #**278** (**permalink**) 06-13-2008, 02:59 PM

The receiver for FXLQ released their latest report to the court and it is chock full of eye popping revelations. http://www.robbevans.com/pdf/forexlqreport02.pdf

Revelation Number 1) the Estate is short two million dollars.

Revelation Number 2) the receiver was able to further confirm that FXLQ had used a fake bond to prop up their adjusted net capital.

Revelation Number 3) FXLQ had been violating their adjusted net capital requirement as early as October of 2006.

Revelation Number 4) FXLQ paid over a quarter million dollars out to the Gray School of Irish Dance.

WTF?

Quote:

Under Tab 30 is a schedule of receipts totaling $251,500 that the Gray School of Irish Dance received from FXLQ, FX ARB, Robert Gray, TMA, and Forexify between April 21, 2006 and December 24, 2007. As the source of all of these funds was FXLQ, it is perplexing why payments to the Gray School of Irish Dance were routed through other entities.

Talk about getting your priorities screwed up. Here is a company that continually cannot meet its adjusted net capital requirement sending out huge chunks of change to what appears to be a dance school in CT? Gray School of Irish Dance Welcome

Hey I love Riverdance as much as the next Irishman but you’d think you would make sure your books are in order before cutting cheques to the tippy toe jumping set.

The good news for customers is that the receiver is recommending customers being fully reimbursed before other creditors. This apparently includes Interbank FX who is owed a whopping $10 million. Judging from IBFX’s plummeting net capital (almost below $20 million) they sure could use the dough.

Expect the FXLQ saga to last through the summer as the receiver continues to dig through mounds and mounds of paperwork, unexplained expenses and dodgy offshore bank accounts…