Hello guys I’m new to learning about the forex market. I just had a question i wanted to be clarified forex brokers that are approved through the CFTC can they still screw you over?
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Of course they can, look at what happen with FXCM. There may be some recourse you can pursue with a CFTC approved brokerage, but its going to be on your time and money.
Thank you, and also would you recommend using the Interactive Broker, or IBFX broker because they seem legit.
Hi @hosep12
As the CFTC states on their website, “Investors should make sure that anyone offering a forex investment is properly licensed and has a reputable business history.”
In the US, forex trading is regulated by the CFTC and NFA. They set the requirements a broker must meet in order to offer services to US residents. Though not an exhaustive list, this page will give you an idea of some of these requirements: Compliance Requirements for Retail Foreign Exchange Dealer (RFED) Applicants | NFA
Particularly noteworthy are the requirements for financial transparency and trade execution accountability. Below is a quote from the CFTC site:
The final forex rules put in place requirements for, among other things, registration, disclosure, recordkeeping, financial reporting, minimum capital and other business conduct and operational standards. Specifically, the regulations require the registration of counterparties offering retail foreign currency contracts as either futures commission merchants (FCMs) or retail foreign exchange dealers (RFEDs), a new category of registrant. Persons who solicit orders, exercise discretionary trading authority or operate pools with respect to retail forex also will be required to register, either as introducing brokers, commodity trading advisors, commodity pool operators (as appropriate) or as associated persons of such entities. “Otherwise regulated” entities, such as financial institutions and SEC-registered brokers or dealers, remain able to serve as counterparties in such transactions under the oversight of their primary regulators.
The final rules include financial requirements designed to ensure the financial integrity of firms engaging in retail forex transactions and robust customer protections. For example, FCMs and RFEDs are required to maintain net capital of $20 million plus 5 percent of the amount, if any, by which liabilities to retail forex customers exceed $10 million. Leverage in retail forex customer accounts will be subject to a security deposit requirement to be set by the National Futures Association within limits provided by the Commission. All retail forex counterparties and intermediaries are required to distribute forex-specific risk disclosure statements to customers and comply with comprehensive recordkeeping and reporting requirements.
These requirements are rigorous enough that only four brokers are approved as forex dealer members in the US as of the latest data from the CFTC.
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Hey C, don’t forget PFG and MadeOff with the money. In fact there was a joke about buying R. Wassendorfs Cadillac, with the hose, and putting a Life Preserver from Madoffs yacht on the roof, driving to a trading show in N.Y. Then charging $10 a head to sit in it. What a concept hahahahahaha. 
The Ever BIG Idea VIPER
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Hi @Cryptosurf and @TradeViper
We can all agree that no amount regulation can fully protect any industry from bad actors, whether we’re talking about forex brokers, carmakers or healthcare.
The advantage of trading with a well-regulated broker is that, at the very least, there are minimum standards both financial and trading, ongoing monitoring by the regulators to ensure compliance, a framework for handling complaints from customers, and the power to enforce actions against regulated brokers for violations.
The CFTC Division of Enforcement investigates and prosecutes alleged violations of the Commodity Exchange Act and Commission regulations. The NFA also has the authority to take enforcement actions against brokers it regulates.
Of any of them I would do TD. But when and if I gain enough consistency and capital, I would bypass any of these and go with a futures broker.
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Interesting you should say that @Cryptosurf 
It might interest you to know that, in addition to being an approved Forex Dealer Member (forex broker), FOREX.com’s parent company, GAIN Capital, is registered with the CFTC and NFA as a Futures Commission Merchant (futures broker) letting you clear trades on over 30 derivatives exchanges across the US, Europe, Asia and Middle East. Is there anything in particular that attracted you to futures?