Gotta pass the Congress first
I have been hearing a lot about FXDD and people have been asking me about their regulatory status. So what’s the scoop?
FX Direct Dealer is a New York City based broker located in Manhattan . FXDD used to be affiliated with Tradition Securities. However, today Tradition only owns a small percentage of the firm. Thus FXDD is in no position to claim Tradition as a parent company for regulatory purposes.
So aren�t they then required to register according to the law? Not according to FXDD. Here is a response I got from a customer service rep over at FXDD when I asked them this question on their chat:
Forex Inquiries: FXDD began as a subsidiary of Tradition North America within the Tradition Group of companies. (http://www.traditiongroup.com/uk/home3.asp). FXDD’s management, operation, compliance, customer relations and its financial policies and procedures were structured to meet the Tradition Group’s oversight and those policies and procedures remain firmly in place. Our managers have deep experience in the foreign exchange markets and we conduct our business as highly qualified professionals. As yet, the OTC spot forex market in the United States is not subject to regulation by the SEC or the CFTC. FXDD is not a member of any private self regulatory organization such as the FINRA or the NFA and is not registered with either the CFTC or the SEC. Congress is considering legislation that will require all forex dealers to register, probably with the CFTC and join NFA as it is the only recognized private futures regulatory authority. So,as the regulatory environment for spot foreign exchange changes, FXDD will keep its options open and, if congress passes new legislation, FXDD will register with the designated oversight agencies. Having said that, FXDD manages its business in conformity with well established dealing protocols and the customs and practices of the foreign exchange dealing community. FXDD has thousands of clients who have chosen us as their dealing firm because of the manner in which we conduct our business and because of our historic association with the Tradition Group. We maintain extensive dealing lines with the top global banks and have never had any issues relating to the protection of customer assets or the manner in which we handle our client accounts.
Uh, someone should let FXDD Know that OTC spot forex IS regulated in the United States and they ARE subject to regulation by the CFTC.
I have put the question to FXDD by email but have yet to get a response. Customers need to be aware that this firm is swimming in some very murky regulatory waters. The CFTC could crash through FXDD�s door at any moment and demand the firm shut down their business because they are not regulated. Every retail forex dealer in the United States has accepted the CFTC as their regulator but FXDD is claiming they have no jurisdiction? This firm in my opinion is a very risky place to put your money. Buyer Beware.
The new CFTC Numbers Are Out. Here they are:
Financial Data for FCMs
Above $20 Million
Oanda $159,786,916
RJ O’Brien $101,983,527
FXCM $81,150,191
GFT Forex $68,407,128
Gain Capital $66,579,458
I Trade FX $35,037,710
Interbank FX $25,733,263
Below $20 Million
PFG $17,986,053
FX Solutions $16,140,253
CMS $13,726,169
ODL $12,639,482
GFS Forex $10.4
IFX $12,343,198
CMC $8,773,706
Alpari $9,001,039
Ikon $8,271,674
Easy Forex $7,799,807
Hotspot $7,675,145
MB Trading $8,015,568
Friedberg Mercantile $7,985,613
Forex Club $7,639,479
Money Garden $6,367,331
Bacera $5,554,498
Advanced Markets $5,239,792
And so it begins. Switzerland has finally decided to flush their financial system and purge the worst forex dealers from their bloated and cramped bowels. Henceforth, any forex dealer who wishes to do business in Switzerland MUST get a banking license. No longer can firms deceive the public by claiming they are regulated because they have a worthless registration with ARIF or some other anti-money laundering committee. Now they must get an actual license, that comes with an actual license number, which allows the trading public to do an actual background check on them. I congratulate the Swiss on taking this huge step forward and with that, leaving the dark ages and entering the modern era.
For more information on this new law read below. Next week I’ll discuss how this law is effecting forex brokers all over Europe. Already two major players are closing their doors (WestCap FX and Northfinance.) Other Swiss brokers are sure to close up shop as well. If you have your money at a Swiss broker you should immediately check with them to see if they plan on complying with the new law. If they do not plan on complying TAKE YOUR MONEY OUT NOW. And if they plan on fleeing to some God forsaken island where there is no regulation TAKE YOUR MONEY OUT NOW.
Switzerland: Foreign exchange traders
Thouvenin Rechtsanw�lte, ZurichInternational Financial Law Review - Foreign exchange traders March 2008 1 March 2008
The Swiss Federal Banking Commission (SFBC) estimates that about 150 foreign exchange (forex) traders are registered as financial intermediaries in Switzerland, who have not been subject to regulation under Swiss banking and finance legislation. In particular forex traders managing accounts for more than 20 individual clients did not fall under SFBC supervision in the past, as long as those accounts were not interest-bearing and were only used to execute customer orders.
In recent years, the SFBC has seen a growing number of complaints, especially from smaller investors, regarding transparency, liquidity and risk disclosure, let alone the substantial losses sometimes suffered by these investors.
The SFBC took action in November 2007 by proposing an amendment to Article 3a paragraph 3 section c of the Swiss Banking Ordinance. Forex dealers will be required to apply for a banking status under the Swiss Banking Act of 1934, as amended. At the same time, security dealers and precious metal traders continue to be exempted with their client accounts under said Article 3a paragraph 3 section c. A banking status under the Swiss Banking Act requires a minimum paid-in share capital of Sfr10 million ($9 million) and further equity requirements to appropriately cover credit, operational and other risks. Bank management members in Switzerland must meet certain professional standards. A Swiss bank must also meet organisational standards, providing for separate corporate bodies for supervision, management and control.
From April 1 2008, existing forex traders in Switzerland are required to register with the SFBC. The registration process ends on June 30 2008. One year later, that is, on March 31 2009, forex traders must meet the above requirements and must have applied for a banking licence.
It is expected that many forex dealers will not be able to obtain a Swiss banking licence because they may not be able to meet the capital and/or organisational requirements. Instead of applying for a banking licence they may explore other legal avenues, such as teaming up with a Swiss bank or Swiss security dealer for example and acting as an independent asset manager, converting their business model by no longer accepting deposits from the public, or by offering their forex products by means of securities or through mutual funds.
NorthFinance Support Team: Do you have an account with us?
you: no acct yet
NorthFinance Support Team: Currently we are not accepting new account openings.
NorthFinance Support Team: To ensure the bests interests of our existing clients and yours as a potential client, we decided to operate as a Master Introducer referring all new clients to FxPro for execution of their trades in Forex and CFDs. This is a European regulated broker with better terms and conditions. More information on FxPro can be found below or by visiting
NorthFinance Support Team:
you: so are you going out of business or something?
you: No North Finance trading platform anymore?
NorthFinance Support Team: Due to the unexpected growth, our trading platform for both REAL and DEMO accounts reached its maximum capacity and the addition of new clients might jeopardize the performance of the platform itself.
NorthFinance Support Team: Therefore, we have decided not to accept new clients on our NF platform to avoid any possible inconvenience or system delays that might be caused and affect existing users.
NorthFinance Support Team: Currently, we are evaluating various options on how to upgrade our platform in order to be able to accept more clients in the near future.
NorthFinance Support Team: We are still operating for current clients.
Swiss Dealer Dead Pool
There is great deal of uncertainty in the Swiss Forex Dealer community right now. There is no way of knowing which firms are here to stay and which firms are collecting coins in preparation for their crossing of the river Styx. I have emailed all the major Swiss firms to try and find out if each firm plans on getting a banking license. The responses (or lack thereof) have been quite illuminating.
As such I’m starting a Swiss Dealer Dead Pool to keep the trading public updated and informed about what is going on in Switzerland.
Firms that announced they are applying for a banking license
These firms have confirmed they plan on getting a banking license.
- ACM
- Fibo Group
- Crown Forex
Firms that are fleeing Swiss Regulation
These firms have stated they are registered offshore and don’t need to register.
- 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.
- 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.
- 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
These firms are no longer accepting new customers.
- WestCapFX
Firms that refuse to comment
These firms refuse to comment on the new licensing requirement thus leaving their customers completely in the dark about their future. I strongly recommend anyone who has an account with any of these firms take their money out immediately due to their lack of transparency.
- GFX Group (Forex.CH)
- DukasCopy
- MIGfx
- Swiss Direkt
- Tadawulfx
- Aleccohfx
- Advised Trading
As always conduct your due diligence and make sure the firm you trade with is regulated and legit.
Anything on North Finance? (I take it they’re not Swiss but asking anyways)
According to their website, they are no longer taking on any new customers either, but they claim that is because they’ve outgrown their capacity to handle more customers. Instead they are referring new accounts to FXPro.com as a “Master Introducer”. Any info on them?
Thanks for your diligent efforts to keep us all in the loop 
Northfinance has clearly antagonized government regulators in Cyprus. In fact, Cyprus regulators have put out a warning on doing business with NorthFinance:
It appears they may have worn out their welcome. It is also a bit suspicious that they stopped doing business at the exact same time that WestCapFX stopped doing business. What is the other connection to these two firms? Both firms are now referring customers to FXPro.com…
Interesting…good to know; Thanks again for the info!
I think I’ll switch over and try Interbank FX … I’m definately not going with North Finance now or FXPro, so why demo with them any longer. 
Over the last few years an increasing number of forex firms have been popping up in Cyprus. It appears the Cypriotic authorities are taking notice and have begun to clamp down on rogue forex dealers. Recently The Cyprus Securities and Exchange Commission put out two separate warnings on forex dealers:
Cyprus Securities and Exchange Commission
Note the second warning is in reference to Northfinance. This warning was put out last summer. Since then Northfinance has stopped accepting new customers as per this widely circulated chat in which they claim they are experiencing "server overload."
North Finance … red light?
NorthFinance Support Team: Hello, My name is Anthony.
NorthFinance Support Team: May I please have your name and North Finance Account Number?
you: hello, my name is (edited)
NorthFinance Support Team: How may I help you?
you: i just want to ask regarding news that i heard, that NF is changing to EURO ORIENT SECURITIES AND FINANCIAL SERVICES LTD.
you: is it true ? and what are the impact to all customer ?
NorthFinance Support Team: Due to the unexpected growth, our trading platform for both REAL and DEMO accounts reached its maximum capacity and the addition of new clients might jeopardize the performance of the platform itself. Therefore, we have decided not to accept new clients on our NF platform to avoid any possible inconvenience or system delays that might be caused and affect existing users. Currently, we are evaluating various options on how to upgrade our platform in order to be able to accept more clients in the near future.
NorthFinance Support Team: To ensure the bests interests of our existing clients and yours as a potential client, we decided to operate as a Master Introducer referring all new clients to FxPro for execution of their trades in Forex and CFDs. This is a European regulated broker with better terms and conditions. More information on FxPro can be found below or by visiting
NorthFinance Support Team: FxPro
NorthFinance Support Team: Existing clients can still enjoy all the benefits of using North Finance
you: so, it is the same company. but not automatically become fxpro member. right ? need to register again, right ?
NorthFinance Support Team: Due to the overwhelming success of North Finance, we have experience incredible growth, and to avoid reaching maximum capacity North Finance will not be accepting any new registrations directly on the North Finance platform
NorthFinance Support Team: It is not the same company, however North Finance does recommend FXPro for new clients
NorthFinance Support Team: North Finance will operate as a Master Introducer referring all new clients to FxPro
NorthFinance Support Team: You can create an FXPro account directly on their website if you wish Sir
NorthFinance Support Team: and you can also continue trading with your current North Finance account.
NorthFinance Support Team: FxPro does differ to North Finance, and FxPro is a European regulated broker with better terms and conditions.
NorthFinance Support Team: You do not automatically become a member of FxPro. You would need to register on the FxPro website
NorthFinance Support Team: You would also be able to withdraw your funds from your North Finance account to your FxPro account if you so wished.
NorthFinance Support Team: You can also to continue trading with your North Finance account as it is if you wish sir
you: oh … i see. ok, thank you very much for the explanation. good bye.
NorthFinance Support Team: You’re welcome
NorthFinance Support Team: Thank you for the chat, Bye for now!
Who is FX Pro? They are the same company that West Cap FX is now referring customers to since the new banking regs got passed in Switzerland. So it appears FX Pro is cleaning up nicely as a result of the increased level of scrutiny for forex dealers.
FX Pro is regulated in Cyprus by the Cyprus Securities & Exchange Commission. In fact, you can check the regulatory status of any Cyprus based broker by going to the Cyprus SEC’s website here:
Cyprus Securities and Exchange Commission
You’ll see FX Pro (under Euro Orient) and other firms such as Easy Forex and Windsor Brokers. This is verification that the firm is registered. I can’t speak for the quality of regulation that Cyrpus provides but clearly any firm that is not registered here with their own license number should be avoided if they are claiming a residence in Cyprus. I see that Northfinance never had such a license number. Is it a coincidence then that they are no longer accepting new customers? I guess we’ll never know for sure…
Regulation can�t come soon enough to Switzerland . Yet another Swiss Forex Broker is going through its death throes right now. After posting my Swiss Dealer Dead Pool a reader told me that one of the firms on my list, Aleccoh FX (naturally it was one of the firms that never responded to my email) was in dire straits and spitting up blood on a gurney over in Switzerland.
It took me a while but I eventually dug up a thread over at Forex TSD that details the whole sordid story. I will condense everything below but if you want the ugly blow by blow of how this firm has gone rigamortis click here:
first 200 pips on me , the rest , we will share - Page 175 - Forex Trading
Aleccoh FX is one of the many unheard of firms that use Meta Trader. Sadly, the Meta Trader community has to play Russian roulette whenever a trader picks a forex broker since most Meta Trader Brokers are merely different sized turds in the MT4 toilet bowl. Sooner or later a stable and regulated firm will offer MT4 but until then MT4 traders will have to keep pulling that trigger hoping they don�t get their heads blown off. Sadly for the traders at Aleccoh FX the chamber was full when they pulled the trigger.
So who are these guys? Well it appears this firm got started back in the spring of 2007. Someone calling themselves �Aleccoh� appeared on the popular MT4 bulletin board Forex TSD claiming that if you sent him a couple hundred bucks he�d make you 200 pips free of charge. Things just took off from there as people poured on to the thread and starting sending him money left and right.
But then things came to a crash in January of this year. Mr. Aleccoh suddenly disappeared from the board. Nobody at Aleccoh answered customer calls anymore. Rumors abounded about another firm taking over Aleccoh that goes by the creepy name of �Spacevision.� Then Aleccoh appeared again in late Feb to state he had retained legal counsel to fight Spacevision (or the Swiss Gov�t? It�s hard to tell this Aleccoh is so shady) and that he was under some kind of gag order and couldn�t reveal anymore information. Then it became public that the Swiss Government had taken over Spacevision and that Monica Favre (no relation to Brett) of the SFBC was heading up the investigation of the whole sordid affair. In short, Aleccoh had become another Tradex Swiss AG.
What this case shows is that the Swiss retail forex market is in complete chaos right now. All my warnings about doing business with Swiss brokers are coming true. The Government is rumored to be conducting over a dozen investigations of forex dealers in Switzerland . In short, sending money to Switzerland has never been so dangerous. More to come tomorrow�
What really burns me up about this Aleccoh guy at the Forex TSD thread is his out and out lies about how his firm was supposedly regulated. A customer asked him specifically in December of 2007 if his company was regulated and asked him if he had a registration number. Mr. Aleccoh stated, �Aleccohfx SA is regulated and run according to the Swiss law under OAR-G Swiss Regulation Official Body Funded by GSCGI.� As I have demonstrated on this thread numerous times OAR-G, ARIF, etc does not mean jack squat in terms of forex regulation. Those are mere certifications stating the firm will abide by Swiss money laundering laws. That�s it! It is not legit �regulation� and traditionally there has been no regulatory agency checking in on these brokers (hence the reason these brokers all now have to get a bank license or close.) These Swiss brokers know that but they continue to lie to the public and claim they are regulated WHEN THEY CLEARLY ARE NOT.
When another trader calls him out on this �Aleccoh� claims, no OAR-G is just like the NFA. He also went on to say that Aleccoh FX would be applying for a banking license. Then shortly after that claimed he didn�t need to get a banking license since the new law in Switzerland only applied to �liquidity providers� and not retail brokers.
Then it all hits the fan and he states, �I am not in charge anymore of aleccohfx because of the fact that the new Swiss regulations forbid me to be in charge or any of my team since we are traders and that it is forbidden to be traders and brokers.� He then claimed to be applying for registration with the NFA in the United States �
Reading through this thread is maddening. You simply can�t trust a single word that comes out of the mouths of these Swiss Forex Dealers. And don�t think this is an aberration. Every Swiss broker has been lying to the public about their regulatory status. DukasCopy, MIG, ACM have all been bamboozling traders about their regulatory status claiming their membership in limp wristed organizations like �ARIF� were somehow the equivalent of being regulated by regulatory agencies like the FSA and NFA.
But the fact is as it stands today none of these firms have real registrations with a real regulatory body. Not ACM. Not DukasCopy. Not MIG. Until they actually GET a banking license don�t put money on deposit with them. They have not been straight with the public and as the Aleccoh FX scam proves a broker�s words don�t mean squat unless they are backed up by the rule of law.
Hi everyone and especially to you forex savior,
I was in the process of going to ask help in choosing a broker, then thought to read through the thread to see if my question hadn’t been asked and answered prior to this time. alas, i 've had a eye full(?), just finished going through the entire thread.
Firstly, thank you to forex savior whatever anyone might think about your motive, i think it compels the prospective trader at least to become more aware by doing his own research. Now, this is my understanding about the issue of regulation of FDMs as it yet stands today, please, correct me if you believe i am wrong. NFA is at best a Self-Regulatory Organisation (more probably a designated self-regulatory organisation) for FCMs in the United States. CFTC functions are defined in their site as highlighted below:
[B]
About the CFTC
An Important Mission in the Ever-Changing World of Finance.
Congress created the Commodity Futures Trading Commission (CFTC) in 1974 as an independent agency with the mandate to regulate commodity futures and option markets in the United States. The agency’s mandate has been renewed and expanded several times since then, most recently by the Commodity Futures Modernization Act of 2000.
In 1974 the majority of futures trading took place in the agricultural sector. The CFTC’s history demonstrates, among other things, how the futures industry has become increasingly varied over time and today encompasses a vast array of highly complex financial futures contracts.
Today, the CFTC assures the economic utility of the futures markets by encouraging their competitiveness and efficiency, protecting market participants against fraud, manipulation, and abusive trading practices, and by ensuring the financial integrity of the clearing process. Through effective oversight, the CFTC enables the futures markets to serve the important function of providing a means for price discovery and offsetting price risk.
The CFTC’s mission is to protect market users and the public from fraud, manipulation, and abusive practices related to the sale of commodity and financial futures and options, and to foster open, competitive, and financially sound futures and option markets.[/B]
In their site, FCMs are the closest type of businesses entities the CFTC has oversight functions for, FDMs does not seem to be included! Could this be because the fx trade is relatively in it’s infancy? In performing their oversight function, CFTC indicates on their site for example that they require FCMs & IBs to be members of NFA. I couldn’t find any mention of FDMs.
Question: If CFTC’s remit include legally the regulation of FDMs, why would they foot-drag in ensuring complaince with registration/regulation by the designated bodies as NFA in this instance? Is it not more appropriate to ensure the proper operation of such firms to prevent the tales of woe as experienced by failed FDMs?
Forex Savior, refer to your thread #122 dated 17/9/2007 titiled FOREX DEALER DEAD POOL (version 4.0) where you indicated the following:
Unregulated Firms (Buyer Beware)
FXDD (?)
GCI (?)
WestCapFX (?)
ACM (?)
MIG (?)
DukasCopy (?)
GFX Group (Forex.CH) (?)
Crown Forex (?)
Krusty’s Currency Trading (?)
Tradex Swiss AG (Shutdown!)
NorthFinance (?)
Ignore for the moment the SWISS FIRMS in the above, why/how could they operate at all without appropraiate registration/regulation if they ought to according to the law as it stands presently? I read the quote from an ealier thread of FXDD which i have also copied and pasted (highlighted below) from the FAQ section on their site.
Q: How is FXDD regulated?
A: FXDD began as a subsidiary of Tradition North America within the Tradition Group of companies. (www.tradtiongroup.com). FXDD�s management, operation, compliance, customer relations and its financial policies and procedures were structured to meet the Tradition Group�s oversight and those policies and procedures remain firmly in place. Our managers have deep experience in the foreign exchange markets and we conduct our business as highly qualified professionals. As yet, the OTC spot forex market in the United States is not subject to regulation by the SEC or the CFTC. FXDD is not a member of any private self regulatory organization such as the FINRA or the NFA and is not registered with either the CFTC or the SEC. Congress may, in the future, enact legislation requiring registration with a federal and/or private regulatory agency. As the regulatory environment for spot foreign exchange matures in the United States, FXDD will keep its options open and, if the regulatory environment becomes consistent and well defined, FXDD will register with the designated oversight agencies. Having said that, FXDD manages its business in conformity with well established dealing protocols and the customs and practices of the foreign exchange dealing community. FXDD has thousands of clients who have chosen us as their dealing firm because of the manner in which we conduct our business and because of our historic association with the Tradition Group. We maintain extensive dealing lines with the top global banks and have never had any issues relating to the protection of customer assets or the manner in which we handle our client accounts.
Note the underlined in the above(emphasis mine).
I like to state that I am NO advocate for non-regulation. Far from it, I believe firmly in regulation of entities otherwise societies would be reduced to jungle style existence. I just think it should be well defined/structured but do not think that the issue of registration/regulation of FDMs is so right now in the United States. I believe too, that this will change because the retail fx trade is set to grow, the awareness is only just begun.
As I indicated at the begining, my views are not set in concrete, I stand to continue to be educated.
Lastly, I want to say thank you to the providers of this forum, what I have learnt here in less than one year is more than what some get out of a college degree programme and to all the contributors, more grease to your elbow; eh, more pips to your accounts.
Great post King. In regards to FXDD. The CFTC is claiming jursidiction over retail FX. However, the CFTC lost a court case against a forex broker who claimed the CFTC didn’t have any legal claim to regulate forex trading. It appears FXDD is using that case as their basis for claiming they don’t need to be registered with the CFTC. However, they are the only firm I know of in the U.S. claiming this. It is a gutsy and very risky decision by FXDD. FXDD is really out on a limb here and customers should be very wary of them.
As I have illustrated on this thread there is no shortage of colorful con artists in the forex business. Yet there is one criminal mastermind in particular who always seems to skate away from his on ice thuggery with more dexterity than one of the Hanson Brothers. His name is Robert Gray. And when he wields the high stick more than just a few teeth go flying into the blood splattered night…
So who is this guy? How has he been able to cut such a swath through the forex industry for all these years? And how was he able to con, not just ordinary traders, but top U.S. Regulatory Agencies themselves? Well, he was able to do it using that old American adage that “Practice makes Perfect.”
The Rob Gray story starts back in the go go 80’s on that notorious stretch of highway running from Boca Raton to Miami known to the Feds as “Maggot Mile.” It was December 11, 1986, when our goodfella to be got started in the futures industry by applying to be an associate member of the NFA with the firm Multivest Options Inc and International Precious Metals Corp Inc in Fort Lauderdale.
BASIC Details
But Gray’s career with these two firms would be short lived and by the summer of 1987 he was no longer licensed by the NFA and had apparently left these brokerages. Multivest itself would eventually be closed down for gross fraud within a few years.
Let’s role the tape and see how Gray got his start as a forex huckster:
Multivest Options Inc was one of the many futures industry orifices oozing with criminality during the decade of greed. The firm all by itself had over 120 Reparations Cases with the CFTC.
BASIC Details
In 1988 the NFA settled a case with Multivest in which numerous salesmen were cited for fraud and high pressure sales tactics.
BASIC Case Summary
And then in 1990 the CFTC shut them down for good stating:
BASIC Case Summary
“from June 1987 through October 1989, MultiVest, while soliciting almost 15,000 customers to invest in commodity options, misrepresented the likelihood of profit in trading commodity options, MultiVest’s success rate, the risks in trading commodity options, the expertise and experience of MultiVest’s sales people, and the extent and quality of MultiVest’s market research. MultiVest was also charged with failing to supervise the handling of commodity options accounts by its salespeople.”
So this is the firm that gave birth to Robert Gray, a fraudulent futures firm that sold bogus options to the gullible Senior Citizens of Seizure World, USA.
The trail goes cold in the 1990’s although rumor has it he gravitated over to the stock market (I can’t imagine Gray missed out on the greatest con off them all, the Internet Stock Bubble…) But his grand debut in the forex world appears to be in 2000 at FXCM of all places. According to a hilarious story I picked up at the New York Traders Expo a couple months ago Gray was the head of sales at FXCM and in a feat of treachery worthy of an Italian Opera he bolted the company with all FXCM’s clients on a floppy disk and went to work at FX Solutions! Well done Rob, Lord Vader from MultiVest trained you well…
But it appears FX Solutions was not all the grateful as he lasted all of three months in their employ according to the NFA’s Registration Records.
BASIC Details
Where to next for this Son of the Sith? Well, how about Director of Global Forex Operations for GFS Forex & Futures. Good Lord, how on earth did Robert Gray land this gig? Doesn’t ANYONE do background checks anymore? Apparently not. Check out this article from 2003 which discusses the growing popularity of mini trading in FX:
The road to mini-success. (Online Trading). | Software Services & Applications (301) from AllBusiness.com
GFS Securities & Futures got on board a few months ago in March. “It was very much a client-driven decision,” says Robert Gray, director of global forex operations for GFS. “The regulatory environment that the markets exist in now is really fueling forex in general.”
Ok for Robert Gray of all people to speak glowingly about the “regulatory environment” for forex is to redefine the meaning of “Chutzpah.” Call it “Grayzpah.” And how about this for Grayzpah. In this lawsuit filed by the State of Colorado in 2004 Robert Gray is listed as a “Compliance Officer” with GFS. What on earth does Robert Gray know about compliance?That’s the equivalent of having Michael Jackson as your babysitter.
http://www.dora.state.co.us/securities/pdf_forms/xlcapital%20receiver’s%201st%20int%20rpt.pdf.
Another interesting note from this lawsuit is the admission that GFS cleared all its trades through Interbank FX. Which brings us to Part II of Dirty Rotten Scoundrel, stay tuned…
Thanks for your reply Forex Savior.
That CFTC lost that case goes to show somehow the indefinitiveness of forex trade regulation presently. I am willing to go long on a security (2 standard lots) that the whole arena of forex trade regulation will become more definitive in a little while. I think of the beauty of this kind of forum, one is the awareness that it provides, at least in the interim, people become more careful. The Robert Gray issue should make an interesting topic for students of psychology with particular emphasis on trait theory 
seriously, imagine what it would be like if there were never any form of checks/regulation in the system, innocent people would be eaten alive.
keep up the good work.
You make a good point about the state of forex regulation in the U.S. It is in need of clafification, something that should be clarified with the new law set to pass in Congress.
When last we left off Robert Gray was busy handing over the financial records of a shady managed funds firm operating under his nose at GFS to government prosecutors. As the court document described GFS was clearing its trades through Interbank FX.
The marriage between Gray and IBFX then became fully consummated in 2005. In March of that year according to the NFA Gray applied to be a Principal with Interbank FX. No telling if he ran over to IBFX with all GFS’ clients but in any case he appears to have officially stayed at IBFX for about six months.
Unofficially? This is where things get very murky. Gray withdrew his license with IBFX on October 1, 2005 and applied for a new one with a newly created FCM, Forex Liquidity, on October 28, 2005. It was at FXLQ where Gray would cook up his piece de resistance, concocting an imaginary $35 million bond out of thin air and using that to pad FXLQ’s official adjusted net capital number.
I won’t rehash the collapse of FXLQ again but if you would like a full recap feel free to go here:
Forex Forum - FXstreet.com - View Single Post - NFA Forex Dealer Dead Pool
While Gray officially cut his ties to IBFX in 2005 there was still a business relationship between the two as evidenced by the fact that FXLQ was a prime provider of liquidity to IBFX. A debate has risen on the bulletin boards as to how dependent IBFX was on FXLQ in providing it with liquidity. In particular one dubious poster on FX Street claims IBFX for a long time was merely a white label of FXLQ and was somehow bound to Robert Gray for life:
Forex Street Weblog: InterbankFX related to FXLQ?.. I do not think so
From: Dan Campbell, Pipland, USA
Date of Post: 2007-12-05Review: I’ve been trying to warn folks for over 2 years now (read my threads below, I used to work there), but justice is finally being servered, “to some degree”. Forex Liquidity (FXLQ) is finally under investigation from the NFA. To recap: InterbankFX (IBFX) is a white label of FXLQ. Hense they are able to say “no dealing desk”. Because in fact “IBFX” does not have a dealing, but rather it’s at FXLQ where all IBFX customers clear their trades…
Sadly, as with most NFA “investigations”, nothing will be done, but this should be a hugh warning bell for everyone using IBFX. Following the bread crumbs folks…
The white label charge comes off as a bit of conspiracy mongering on the part of this Dan Campbell as IBFX continues to operate for the most part without incident even as FXLQ has been shut down. But it does beg the question how on earth did Robert Gray accrue so much influence in this industry?
Gray has been linked to numerous firms from FXDD, to Spencer Financial to Velocity FX. Google him and his name appears all over the bulletin boards like a plague bacillus. Forums - Any Recommendation for MT4 based Fx Broker
http://forexbastards.com/forum/inde...96&min=0&num=15
MoneyTec Traders Community Forum
So deep is his influence that he even pops up in China heading up another fx brokerage called MultiBank FX (great mugshot of Gary on page 7):
http://www.fxmultibank.com/pdf/brochure.pdf
And while IBFX may still be up and running their relationship with Robert Gray has cost them dearly as FXLQ owes Interbank over $10 million in frozen assets according to FXLQ’s own Receiver:
http://www.robbevans.com/pdf/forexlqreport01.pdf
It’s my hope that the new NFA Capital Requirement increase to $5 million will help weed out the Robert Grays of the FX World. Gray flourished in the weeds of the industry at small firms that never seemed to get the NFA’s attention. But with the industry reduced to 24 domestic firms and with new rules set to require all Introducing Brokers be licensed his time will have come and gone and none too soon.
I read at one of these links that Robert Gray has an Irish passport and that if things ever get too rough he can always hop on Aer Lingus and live out his days shepherding sheep on a quiet farm outside Galway. Well, should that day come I’m sure the forex trading community will sing in unison:
Oh Robbie Boy, the pipes, the pipes are calling
From glen to glen, and down the mountainside.
The summer’s gone, and all the flowers are dying.
'Tis you, 'tis you must go and we gladly say goodbye.
But come ye not back when summer’s in the meadow
Or when the valley’s hushed and white with snow,
'Tis we’ll dread you be there in sunshine or in shadow.
Oh Robbie Boy, Oh Robbie Boy, we loathe you so…
There is a great deal of uncertainty in the Swiss Forex Dealer community right now. There is no way of knowing which firms are here to stay and which firms are collecting coins in preparation for their crossing of the river Styx. I have emailed all the major Swiss firms to try and find out if each firm plans on getting a banking license. The responses (or lack thereof) have been quite illuminating.
As such I’m starting a Swiss Dealer Dead Pool to keep the trading public updated and informed about what is going on in Switzerland.
Firms that claim they are applying for a banking license
- ACM
- Fibo Group
- Crown Forex
- DukasCopy
- MIGfx
Firms that are fleeing Swiss Regulation
- 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.
- 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.
- 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
- WestCapFX
- Tradex Swiss AG
- Finex
- Aleccohfx
Firms that refuse to comment
- GFX Group (Forex.CH)
- Swiss Direkt
- Tadawulfx
- Advised Trading
As always conduct your due diligence and make sure the firm you trade with is regulated and legit.
After getting a series of tips from disgruntled traders I’m going to follow up on a couple unregulated forex brokers next week dabbling in the treacherous MT4 arena. Masterforex, PoltekFX and FX Open are involved in a brutal slugfest that has spilled over into numerous bulletin boards. Who are these firms and what are they up to? Details to follow next week.