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

[Fat Tony]

Originally Posted by clickr12

I'm not interested in proving this because I found out simply by doing research - which ANY OF YOU can do on your own. One of them I know is a startup,

What's with all the secrecy? In earlier posts you had no problem linking to the CFTC to show us how much money each firm had. That was research we could have "done on our own." So who are these two firms? I'm curious now.

[rhodytrader]

Originally Posted by forex savior

Well, it looks like the forex dead pool is about to claim its first two victims. Read it and weep.

The NFA has issued serious complaints against two small, undercapitalized firms.

The first is Advanced Markets (Amifx). The NFA says in its complaint, “On June 28, 2007, NFA issued a Complaint charging AMI with cheating, defrauding or deceiving another person or attempting to do so and failure to observe high standards of commercial honor and just and equitable principles of trade. The Complaint also charged AMI with failure to maintain required adjusted net capital; failure to take required charges; failure to collect and maintain required security deposits; failure to file accurate weekly reports; and failure to maintain accurate records.”

http://www.nfa.futures.org/basicnet/...px?seqnum=1251

What is even more frightening is that Amifx has only $1,020,000 in capital. Could this be ANOTHER UGMFX?

The second is against Bacera Corporation (whoever they are?) But just like UGMFX Bacera looks like they got no money left. On June 28, 2007, NFA issued a Complaint charging Bacera with failure to give required notice; failure to maintain required adjusted net capital; failure to take required charges; and failure to maintain accurate records. The Complaint also charged Bacera with cheating, defrauding or deceiving another person or attempting to do so and failure to observe high standards of commercial honor and just and equitable principles of trade. Finally, the Complaint charged Bacera, Wong, Hsu and Valdivia with failure to supervise.

It seems like these smaller firms are going under on a weekly basis. I'll keep everyone posted as the dead forex firms walking continue to die off...

My focus here is the "..cheating, defrauding or deceiving another person or attempting to do so and failure to observe high standards of commercial honor and just and equitable principles of trade" part, which I think is the more pointed charge against these firms. The rest of it strikes me as just additional charges which might or might not have been put forth in this way if the companies weren't screwing people - or alledgely doing so anyway.

[clickr12]

Originally Posted by Fat Tony

What's with all the secrecy? In earlier posts you had no problem linking to the CFTC to show us how much money each firm had. That was research we could have "done on our own." So who are these two firms? I'm curious now.

Okay, seriously, this is the last one...

It's not secrecy. One is a report cut from the CFTC. The other sources are calls to the CFTC and NFA to ask about said companies. If I quote those phone calls, I'm no better than anyone else at sending unverified sources - so I'd rather refer people to call the reg bodies rather than posting names and saying "This is what I was told when I called and asked." A little bit of research online seemed to verify that information.

Bottomline, I'm no more credible than the next random post, so you're best off to check on it. At worst, you have to check like 10 firms to find the two.

I guess if you want to private message me, you can... I'm just wary of posting my phone calls to a forum because I feel it doesn't make me any better than the rumor mill.

My focus here is the "..cheating, defrauding or deceiving another person or attempting to do so and failure to observe high standards of commercial honor and just and equitable principles of trade" part, which I think is the more pointed charge against these firms. The rest of it strikes me as just additional charges which might or might not have been put forth in this way if the companies weren't screwing people - or alledgely doing so anyway.

The fraud is very very serious, and seem to lead to the other problems. I'm astounded by some of the NFA reports where they have usually 10 different issues of fraud, some of which had nothing to do with undercapitalization.

[Fat Tony]

Originally Posted by clickr12

I guess if you want to private message me, you can... I'm just wary of posting my phone calls to a forum because I feel it doesn't make me any better than the rumor mill.

Clickr your posts are like something out of the twilight zone. If you are so concerned about the rumor mill than why did you even bring up these two firms' parent companies in the first place? And if you aren't going to bother to tell us who these companies are then stop referencing them in your posts! Because your failure to reference them gives off the appearance that you are simply making it all up. Which I suspect you are.

[clickr12]

Because your failure to reference them gives off the appearance that you are simply making it all up. Which I suspect you are.

I only brought them up because I did the checking on those. To the respect that it is adding to the rumor mill, I apologize. That was probably a mistake, so I'm trying to correct it now by not repeatedly using it, but... it's hard not to get aggravated when I know better because I checked..... arrrrgggh. Soooooo, I'm trying to correct that - and I'll start fully now. If the private message is a problem - I'm trying to find a way to be informative. I thought this would allow people to ask without posting it in public forum. But no one has PM'd that I've seen, and to be fair, I won't respond that way if you think that makes some conflict of interest. I can see that someone would say it's still providing information, so you're probably right - they should call the NFA/CFTC. If you look at the sheet though, it should be obvious that some of the companies are obviously not bankrupt like it was said last month, and some have healthier balances.

To the larger point where you seem to doubt my credibility - what possible motivation would I have to saying I've checked on two companies to be underhanded, then encouraging people to do their due diligence to check themselves? Wouldn't it make more sense to use other methods if I were trying to solicit for two companies on that list? Wouldn't I *not* want people to check with the regulatory bodies? Can you construct a scenario where I'm trying to defraud people into investing with these companies based on what I've said with regards to calling the CFTC or NFA? If you can't, I don't understand what you're implying. And you certainly don't seem to ask for that same information from other people here. I can't think of any case where a person committing fraud would be saying "Call the authorities and ask them."

I've already openly said I don't work for any of the companies on the "dead" list. Can I make it clearer than that? How can I make it clearer?

With regard to my larger point, clearly you have no problem with someone attributing fraud to *potential* undercapitalization based on a proposal that hasn't yet passed. I think that's... a shame and problematic at best, but that's your opinion.

In all seriousness, I'm done with responding... really. One person (Fat Tony) seems overly fixated on one sentence from like... 3 of my posts, and to that end, it's distracting from my main point on the tone of the starting posts in this thread. I don't blame him for looking for some ulterior motive in my statement (although I think it'd be nice if he'd do the same for others in this thread), and to that end, I'm just tired. So please leave me out of this discussion now.... or send me an email if you really feel you must "put me in my place."

[pekopkp]

It's a shame you guys got so involved over nothing

[forex savior]

As I continue to update the dead forex firms walking list I'm amazed how many people think fraud and undercapitalization are completely separate issues. Often times they are not. The reason is quite simple: firms that are committing fraud are not known for having legible books. And Vice versa. Firms that have a hard time maintaining their capital requirements will often cut corners and commit fraud to keep their firms from going under. Finally, smaller firms simply don't have the money to maintain the kind of large legal and compliance staffs necessary to keep up with the battery of regulations being issued by the NFA and CFTC. And of course some firms are just plain incompetent. All these factors have come to a head with Forex Dealer Dead Pool Member One World Capital, who is now in serious trouble with regulators.

To see the full report on One World's misdeeds you can click on the NFA's report yourself: http://www.nfa.futures.org/BasicNet/...px?seqnum=1190

I have highlighted some of the worst allegations below. After reading through them I think you'll understand why One World is on the dead firm's walking list and why that should be serious cause for concern for anyone who has an account with them or any firm like them.

"One World lacked an understanding of, or was inattentive to, regulatory requirements and was ill prepared to accept customer business as either an FDM or an FCM. The firm had not established adequate systems to enable it to handle customer funds or comply with customer reporting requirements."

"The firm was unable to properly account for its liabilities to its forex customers." (Insert appropriate jaw dropping sound. This is the text book definition of a firm destined to go bankrupt.)

"In addition, NFA's audit found that One World and Walsh [Principal] provided false and misleading information to NFA auditors concerning an individual names Charles Martin and his role at One World. Walsh said Martin had no involvement in the firm. However, NFA subsequently learned that Walsh's claim was untrue and that Martin was, in fact, heavily involved in the operations of One World and solicited customers on its behalf." (Who is Charles Martin you ask? The NFA states Martin was turned down to be a principal before because of a "felony drug conviction and a misdemeanor theft conviction.")

It goes on and on, misleading promotional materials, outright lies to regulators, failure to report capital and maintain any semblance of book keeping standards. In short, One World is a classic Dead Forex Firm walking. Firms like One World are the reason the NFA is going to raise capital requirements. And when they do, does anyone honestly believe the One World's of the world will survive?

[rhodytrader]

Originally Posted by forex savior

... I'm amazed how many people think fraud and undercapitalization are completely separate issues. Often times they are not. The reason is quite simple: firms that are committing fraud are not known for having legible books. And Vice versa. Firms that have a hard time maintaining their capital requirements will often cut corners and commit fraud to keep their firms from going under. Finally, smaller firms simply don't have the money to maintain the kind of large legal and compliance staffs necessary to keep up with the battery of regulations being issued by the NFA and CFTC. And of course some firms are just plain incompetent.

True enough. But small doesn't necessarily mean fraudulent, just as large doesn't necessarily mean free of fraud. In fact, in some ways there could even be an increased risk of misdeeds at a larger firm just because of the amout of money involved.

[clickr12]

Originally Posted by rhodytrader

True enough. But small doesn't necessarily mean fraudulent, just as large doesn't necessarily mean free of fraud. In fact, in some ways there could even be an increased risk of misdeeds at a larger firm just because of the amout of money involved.

Exactly.

This post also kind of explains the things I wanted to say, but was not eloquent enough to say. (it was posted in response to essentially a copy of this same post on that forum)
Forex Factory - View Single Post - EFX Group - Introduction

[Fat Tony]

I'm not familiar with efx. Does anyone here use this broker?