When you get a chance, would you mind sharing your concerns here, as I don’t have enough posts to email you yet ? I have a small live account with them, and haven’t had major problems with them. I was going to do a test withdrawal next week with them once I have a small gain to check their payment integrity.
Not going to mention who at Smarttrade told me this, but someone (at Smarttrade) told I should never worry about a pip or two spread difference, as theirs is not the lowest.
Although I did not respond to him, my immediate thought was, “are you friggin crazy”?
Aside from the obvious retail broker problems like requotes, slippage, spikesm connectivity, slow pay/nonpay,
HOW MAY BUSINESS OWNERS DO NOT CAREFULLY WATCH THEIR EXPENSES AS THEY ARE TRYING TO GROW THE BUSINESS ?
Although this has probably already been mentioned, they also aren’t regulated.
Meanwhile, the US CFTC sues 11 more Forex brokers (including some of the offshore ones) for accepting and servicing the US customers without the US CFTC registration:
1st Investment Management, LLC, a Wyoming LLC;
City Credit Capital, (UK) Ltd., a United Kingdom company;
Enfinium Pty Ltd., an Australian company;
GBFX, LLC, a New York LLC;
Gold & Bennett, LLC, a New York LLC;
InterForex, Inc., a British Virgin Islands company;
Lucid Financial, Inc., a Utah corporation;
MF Financial, Ltd., a Belize company with offices in New York City;
O.C.M. Online Capital Markets Limited, a British Virgin Islands company
Trading Point of Financial Instruments Ltd. a Cyprus company; and
At least, the US CFTC position is now absolutely clear: in their viewpoint, no foreign brokerages whatsoever (even those that do not have any offices, IBs, servers, telephone lines etc in the US) are allowed to service the US customers without obtaining the US CFTC registration beforehand.
In other words, to the US CFTC, foreign brokers are to follow the US law even if all servicing takes place completely offshore. It’s in a way like a hotel in France would need to follow the US law while servicing a US customer on the French soil. Something must be seriously wrong with Gary Gensler and to me it’s more of a medical issue than a legal one.
I now wonder what the reaction of the sued foreign brokerages will be and what their chances to win the lawsuit are. I’m also curious why the US brokerages do not act upon, say, the Russian law while servicing the Russian customers or upon the German law while servicing the German ones. :16:
One thing is that if one reads the actual complaints on the CFTC web site, they do purport to claim jurisdiction by claiming that acts took place within the territiry of the court.
For example,
“Venue properly lies with the Court pursuant to Section 6c(e) of the Act, as
amended, to be codified at 7 U.S.C. § 13a-1(e), because City Credit transacts business in this
District and certain transactions, acts, practices, and courses of business alleged in this
Complaint occurred, are occurring, and/or are about to occur within this District”
I imagine that the defendants would dispute that if they enter a defense. Some brokers may choose to not enter a defense since they maintain that the CFTC has no jurisdiction in the first place.
Another interesting point is that forex transactions that settle within two days are currently not regulated. This is acknowledged within the complaint by saying that the broker in question does not call for settlement within two days. However, some other foreign brokers, not sued, may be aware of this exception and may be taking advantage of it.
One thing’s for sure, he’s on a power trip. I would call it a Napoleon complex.
From Wikipedia:
[I]Napoleon complex[/I] is an informal term describing an alleged type of inferiority complex which is said to affect some people, especially men, who are short in stature. The term is also used more generally to describe people who are driven by a perceived handicap to overcompensate in other aspects of their lives.
This appears to be the most likely outcome - partly, for the above reason, and partly, because court cases are very expensive and time-consuming. If an overseas lawsuit does not hinder an offshore broker’s usual business, chances are this lawsuit will be ignored. Then the US CFTC will need to argue in the US court about the business transactions having had taken place in the US. Since all transactions (trading) take place on a broker’s overseas server (apart from those dumb offshore brokers who had their servers located in the US), I’ll be very curious to see how the court is going to rule in the CFTC’s favor here.
I personally prefer Finland-based FinFX due to their tighter spreads. Also, FinFX hasn’t been sued by the US CFTC to date despite continuing to accept and service the US customers - it might be because of FinFX calling for settlement of Forex transactions within two days, as [B]comintel[/B] mentioned, or for some other reason.
I’ve been watching and looking around for a broker to activate account. Was on demo with SmartTradeFX and
looking to activate today but they told me door was closed to US citizens, because news of brokers being sued
Another is that the CFTC could not find a U.S. customer of FinFX who was filling to file a complaint.
I suspect that a lot of customers of all brokers, registered and not, regularly file complaints with the NFA and CFTC when they lose money on trades. Some grievances may be real, some imagined. Probably the CFTC goes thumbing through these to look for any unregistered brokers it can sue.
I notice that the suits are scattered across numerous different Federal Court Districts.
These are likely based on where the complaining customers of these various brokers live, and, to the CFTC’s way of looking at things, gave rise to these brokers “carry on business” there by allowing their web page to be seen etc. and trades carried out.
All trades are carried out on a broker’s server which is usually overseas. As for the websites being accessible in the US, the brokers’ domestic regulators do not require of them to have their websites inaccessible in certain parts of the world. If the CFTC doesn’t like it, they’re free to develop, legislate, and implement a mechanism preventing Americans from viewing certain foreign websites, like China and North Korea did.
I agree and I think a court might well also, especially if the cases were defended vigorously.
But it would be expensive for these brokers to hire U.S. lawyers and so many will settle or allow default judgment.
The press release did imply that a few of the foreign brokers previously sued have filed defenses. So we can hope that the CFTC loses those cases and a precedent is set. Of course if the CFTC sees that coming they will try to settle them to avoid that.
