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NFA Takes Action Against Gain Capital

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  • First Post: Jun 30, 2010 5:22pm Jun 30, 2010 5:22pm
Hey Guys,

This just showed up on NFA's BASIC search site for Gain Capital. This is some pretty interesting reading. Check it out:

http://www.nfa.futures.org/basicnet/...px?seqnum=2461

Here are some highlights:

Count 1 - Deceptive Margin and Liquidation Practices resulting in customer losses.
Count 2 - Enganging in manipulative acts or practices regarding prices. .

There is also stuff about them not cooperating with the NFA and not supervising their solicitors.
Thanks for posting this.

Very interesting, to say the least. And to think that Gain is one of the big players in this market!

For anyone wanting proof of the existence of MT4's "Virtual Dealer Plug-in," look no further. The NFA audit on Gain's server operations reveals this broker took advantage of it to the detriment of its clients.

I'm still a fan of MT4 but I guess I will stick to just using it for charting.
Amor Fati--F. Nietzsche
Hey, goes to show the NFA might be good for something. It's too bad they can't focus more on this kind of crap.
Hmmm.. first FSC, now NFA. Have they finally woken up?
I would think that Gain should be charged with Felony Theft and Fraud charges.

I am not a lawyer but they are (imo) clearly acting in a criminal manner..

Makes you rethink even using MT4 for actual trading.
Quoting tommyd
I would think that Gain should be charged with Felony Theft and Fraud charges.

I am not a lawyer but they are (imo) clearly acting in a criminal manner..

Makes you rethink even using MT4 for actual trading.
That actually proves you are not protected even if your broker has NFA regulation. I can't say it's a big news for me, but it still makes you wonder.
Good find--published only yesterday! Usually these audits turn up a lot of trivial discrepancies but this one seems a little more incriminating. I've had Gain accounts for years--forex.com and TradeStation. I was never aware of the "flexible" margin policy.
Put them out of business, and any other broker doing the same thing. I wonder who is next?
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They really screwed the pooch on the delayed IPO.. first the China pull-out & now this.

They should put more marketing effort behind their GTX ECN platform, I've heard nothing about it. These brokers that run both MM & ECN models simultaneously (FXCM, Gain, FXopen) should really just open up their ECNs for all of their clientele & ditch the scam-fest which is market making. Clearly the marketplace is slowly moving away from a MM model (which hopefully the NFA/CFTC will accelerate).
Here is page 8 that discusses the nasty Virtual Dealer Plugin.

You can see that they introduce an artificial and unnecessary delay of 1 second for every order. It serves absolutely no beneficial purpose for the trader, and only beneficial for the broker. This execution delay should be eradicated.
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Gain/Forex.com are not the only broker using the virtual dealer plug-in to delay orders. Now that this has been brought to the attention of the NFA, I expect more brokers will be caught during NFA audits.

Funny how when you ask brokers whether they use this plugin, they all deny it. Well, there is no denying it any more.
I agree, Certainly they are not the only broker who is using this VD plugin.

Quoting tommyd
I would think that Gain should be charged with Felony Theft and Fraud charges.

I am not a lawyer but they are (imo) clearly acting in a criminal manner..

Makes you rethink even using MT4 for actual trading.
XAU-XAG/USD_Gold n Silver Trader's Thread = Technicals, Fundamentals & News
Obviously the MT Backend platform has this feature built in. But now, I can imagine the "other" proprietary platforms having some type of similar control.
The Virtual Dealer Plugin is not built in, but is a piece of software that can be bought in addition to the core server software.

This artificial delay really angers me. I'm planning to move my funds (almost 30K USD) from FOREX.com to another broker who does not intentionally delay order execution. FXDD seems to have better execution (I already have a funded account there), but I'd be open to other suggestions.

It would be good if a Gain Capital / FOREX.com representative comes on here to explain themselves... and make an announcement that the artificial execution delay will be removed, in which case I will decide to remain.
Quoting Hyper
This artificial delay really angers me. I'm planning to move my funds (almost 30K USD) from FOREX.com to another broker who does not intentionally delay order execution. FXDD seems to have better execution (I already have a funded account there), but I'd be open to other suggestions.

It would be good if a Gain Capital / FOREX.com representative comes on here to explain themselves... and make an announcement that the artificial execution delay will be removed, in which case I will decide to remain.
Forgiveness must be one of your virtues?? Or are you trying to assist Gain Capital on damage control?

Traders should unite and move their biz away from brokers who basically cheat their customers. Perhaps if Gain Capital were to reimburse every one of their clients who have been unfairly treated and on top of that offers an additional penalty for their misbehaviour to demonstrate their remorse, may be they could salvage some thing. But would anyone with half a brain continue to do business with such a broker after the trust has been broken? You mean all Gain Cap need is to come out with a statement that says they are no longer doing artificial execution delay and everything is forgiven??? All I can say is Hyper you are too nice a person to do Forex. May you live long and prosper.
I have a FOREX.com account out of the UK, and have not had any problems what so ever.

However, I am also not trading such large lot sizes either.

Maybe someday if things keep going right!

I set up an account with forex.com/Gain because I thought they were the most reputable, but after reading this think I was wrong.

Definitely shady business practices.

When executing manual trades using MT4 on forex.com you can really notice the 1 second delay that is built it. Manual trades on my GoMarkets account execute far quicker and with less slippage.
Just ran across this thread and have to ask: Do you really think, there is ANY broker who is doing legal business?

I am with Alpari UK, Activtrades UK and with eglobal, a cent broker located in Greece...
All with MT4 platform and as far as I have experienced and observed now over about 2.5 yrs, they all use their tricks!
You get requotes almost every time, even with manual trading, the placement of an order takes at least a second, sometimes more - same with closing orders and even if the market is pretty quiet.

And if you are using an EA, you might not get any orders at all or just after your EA has faught to open the order.And if the broker has changed the accounts "for your favor" ( as they claim) to "market prices ( therefore flexible spreads ), you can see spreads raising immediately when your EA wants to open an order or if an order is open and itīs a scalp, you might have a loss because of spreads way over 40 all of a sudden ( seen on GBP/CHF many times, so called "roll over spreads" ).
Not to mention the so called "SL" hunting....or "hunting" of stop-orders ( open the stop-order, mostly by one pip, just to turn against the trader right after )

So as far as my conclusion goes there is NO broker at all, at least not available for us and for sure not with any platform like mt4, etc. where they can put their programs from their side, too, who is "fair" and without tricks....and THATīs one of the main reasons why so many people loosing their money....
Quoting 4rexLady_de
Just ran across this thread and have to ask: Do you really think, there is ANY broker who is doing legal business?

I am with Alpari UK, Activtrades UK and with eglobal, a cent broker located in Greece...
All with MT4 platform and as far as I have experienced and observed now over about 2.5 yrs, they all use their tricks!
You get requotes almost every time, even with manual trading, the placement of an order takes at least a second, sometimes more - same with closing orders and even if the market is pretty quiet.

And if you are using...

Why don't you change to a good ECN broker? This is the problem with this whole community. People (like yourself) just put up with crap like this and think "this is just how it is" Do yourself a favor and do some research, read some reviews and find a broker who doesn't play bullshit games like this. I've been trading for a few years with thousands of orders and I don't even know what a "reqoute" means. I press "Buy" or "Sell" and then I magically have an order at that price.. Amazing!
Cap
NFA stock just went up 2 points in my book. This is what the NFA *should* be doing for the sake of retail clients. At least they're doing something other than simply making life difficult with their "no hedging", FIFO, and the like.

It is shocking that Gain is doing this, but it's equally shocking the NFA is shining just a bit of sunlight on Gain's larceny. Way to go, NFA!!

Now, if only the NFA could order disgorgement of Gain Capital's ill-gotten gains. Fines, being expelled from NFA or whatever is all well & good. But the bottom line is customers, both named & anonymous are still out the money Gain stole from them. I still bet Gain just gets a slap on the wrist and laughs all the way to the bank. Just watch.
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