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  • #221
  • Aug 12, 2007 5:05pm Aug 12, 2007 5:05pm
Quoting Clubber Lang
That sums up Forexfun's attitude Chips. In one sentence he tells you to "do your research" in the next he tells you essentially "its none of your business." forexfun in all likelihood works in the cubicle next to Justin at EFX. Beware any advice from this guy...
Says the guy that showed up on these boards last month when Forexsavior started taking a beating.
FXChant Singing the World of Forex
  • #222
  • Edited 8:26am Aug 13, 2007 12:07am | Edited 8:26am
Quoting Clubber Lang
That sums up Forexfun's attitude Chips. In one sentence he tells you to "do your research" in the next he tells you essentially "its none of your business." forexfun in all likelihood works in the cubicle next to Justin at EFX. Beware any advice from this guy...
I wasn't aware that the only way to do research was to scan someone's books. Heck, how is that even remotely doing research? That's asking someone else to do research for you. That's also the first time I've said that the books are none of his business, but why let facts stop you from a smear comment?

Secondly, I have openly stated I don't work for a forex company. I dare you to find savior doing the same. He hasn't yet answered that question that I've seen. (it's possible I've missed it). Heck, half the people who post here don't answer that question, so I can't even hold savior that much as an example on it.

I do spend an ever increasing amount of time reading about this stuff, although much of my reading of late has been Futures magazine.

I'll place a bet with you Clubber. If you can show me any real evidence that I work with Justin or work at EFX, I'll a) apologize openly b) pay you a thousand bucks. Heck, 10000.... heck, a million. It doesn't matter to me how much you want because even if the site hosts were to give you access to the IPs showing where we come from, I know for a fact they won't show I work at EFX or MB. If I could think of a way to prove that, I would, but I personally can't think of any way to prove it in any realistic manner.

So in all seriousness, Clubber, you can take your pompous comment about "working in the next cube" and shove it. I love how the fact that I agree with Justin, it means I must be working with the guy. You know, cause I can't have my own personal opinion.

If you MUST KNOW, I am completely on the side of any private business in the case of open books because I own my own private business (non-forex or even financial related) and I've heard people on occasion ask me why I don't show them my books and open everything up. I don't have to - for one, my business isn't big enough to really want to, and secondly, *I'm specifically not a public business*. I'm not required to show you anything, but its amazing that customers will ask for that like they have some God-given right to see it. For one, it gives a potential competitor the ability to see how much money I have in whole - if I'm facing a bigger competitor, they can know about how much money I have to do battle with them and basically how much it would take to squash me. And that's only ONE of a myriad of possible reasons a private business could have for not showing their books. I have no idea why forex companies specifically don't have to show their books, but they don't, and from the perspective of the private business, until they're forced to, I'm on their side. If the NFA/CFTC wanted open books like that, I see no reason why they couldn't move to require that.

But you're right, I must be an industry plant. There are no other possible explanations.

[This is also the second unfounded insult you've tossed my way (the first being when I called to check on a company with the NFA earlier in this thread). I'm going to try to stay polite, but you haven't bothered to engage in polite discourse. At least Savior, as much as I disagree with him on some of his stuff, goes back and forth in conversation. ]

[ Yes, I also realize the irony of asking someone with the nickname of a Mister-T played boxer from a Rocky movie for polite discourse ]
  • #223
  • Aug 13, 2007 3:53am Aug 13, 2007 3:53am
man what a crazy thread.

as for forexsavior....i dont know whether to listen to this guy or not. he does show some points.

as for mbt, im surprised they have capitalization of only 3 million? that kinda shocks me, i thought they've been around for over a decade...i thought mbt was much bigger than that.

its true that some marketmakers like oanda are trustworthy, but the conflict of interest as justin often pointed out bothers me a LOT. the fact taht a firm makes money each time you lose....

why is it that ECN players in the forex market is only MBT/EFX and IB? if this non dealing desk model is so trustworthy, why aren't others jumping into this ecn business? why have there only been such few ecn compared to market makers? mb because mm are more profitable?

but i think we see ndd is the ideal solution for retail investors, however, im curious, why haven't other new firms jumped in? the barrier of entry is not that high? or is it?
{Promotion Removed}
  • #224
  • Aug 13, 2007 8:19am Aug 13, 2007 8:19am
Quoting jjk2
why is it that ECN players in the forex market is only MBT/EFX and IB? if this non dealing desk model is so trustworthy, why aren't others jumping into this ecn business? why have there only been such few ecn compared to market makers? mb because mm are more profitable?

but i think we see ndd is the ideal solution for retail investors, however, im curious, why haven't other new firms jumped in? the barrier of entry is not that high? or is it?
Just clear some points here:

1, Not only MBT, IB are ECN, but also include Spotfx, COESfx, Dukascopy, etc.

2,The set-up for a ECN do not be as easy as you imagine. It needs two core
competitiveness: The ECN technology; The relationship with banks.

3, Ndd does not equal to ECN. For ECN, besides Straight Through Processing(STP), clients can also view his open orders in Level II, aka market depth.

regards,
mike
Trading is a business
  • #225
  • Aug 13, 2007 9:45am Aug 13, 2007 9:45am
Quoting jjk2
man what a crazy thread.

as for forexsavior....i dont know whether to listen to this guy or not. he does show some points.

as for mbt, im surprised they have capitalization of only 3 million? that kinda shocks me, i thought they've been around for over a decade...i thought mbt was much bigger than that.

its true that some marketmakers like oanda are trustworthy, but the conflict of interest as justin often pointed out bothers me a LOT. the fact taht a firm makes money each time you lose....

why is it that ECN players in the forex market is only MBT/EFX and IB? if this non dealing desk model is so trustworthy, why aren't others jumping into this ecn business? why have there only been such few ecn compared to market makers? mb because mm are more profitable?

but i think we see ndd is the ideal solution for retail investors, however, im curious, why haven't other new firms jumped in? the barrier of entry is not that high? or is it?
In case this hasn't been clear on these boards forever...deal desks make a fortune. Where do you think all of the money comes from that allows firms like Oanda to be capitalized so high? As a deal desk, you're basically just handing your account to them. At some point in time, they'll screw you on a trade and take a chunk of your money, and it ends up in their pocket. Having said that, what is the financial incentive for these companies that have been making so much money all of these years as desks to suddenly spend millions on routing technology, place millions in deposits with the various banks to get access to their liquidity, and drop themselves to earning a small commission per trade? The only real incentive will be when it is obvious that the average customer is smart enough to leave them for the others, such as MB and IB. Note that BOTH of those came into forex and never were deal desks. Both have strong reputations in the stock world of giving their customers excellent execution at a great price. That is the mentality that is needed to bring ECN trading to the forex world. The rest of these desks make too much money to care, but you can see that this is changing. That's why someone like Forexsavior suddenly shows up, trying to equate a bunch of small deal desk firms that you've never heard of going under with companies like MBTF/EFX. The damage is being done to the desks, and time is running out. And by the way, since the ECNs all can hook up together, my guess is that in the end, there will basically be room for two or three forex ECNs. The rest of these companies will cease to exist as all clients will end up there. It's a big money game.
FXChant Singing the World of Forex
  • #226
  • Aug 13, 2007 9:46am Aug 13, 2007 9:46am
Quoting Changzhou
Just clear some points here:

1, Not only MBT, IB are ECN, but also include Spotfx, COESfx, Dukascopy, etc.

2,The set-up for a ECN do not be as easy as you imagine. It needs two core
competitiveness: The ECN technology; The relationship with banks.

3, Ndd does not equal to ECN. For ECN, besides Straight Through Processing(STP), clients can also view his open orders in Level II, aka market depth.

regards,
mike
1) Spotfx? Coesfx? They're gone, dude. Dukascopy an ECN? Get real.

2) I totally agree (see my prior post).

3) I totally agree.
FXChant Singing the World of Forex
  • #227
  • Edited 10:31am Aug 13, 2007 10:15am | Edited 10:31am
Quoting fxchant
1) Spotfx? Coesfx? They're gone, dude. Dukascopy an ECN? Get real.

2) I totally agree (see my prior post).

3) I totally agree.

Dukascopy is a swiss broker, definitely an ECN.

I'm sorry, I mean HotSpotfx, mainly for insititutional clients.But also have set up a platform for individual customers.

Coesfx is still in business. But it is more likely a technology firm. Anyway, Coesfx have a unclean compliance history with NFA.
Trading is a business
  • #228
  • Aug 13, 2007 10:42am Aug 13, 2007 10:42am
ForexFun your comments to Mr Chips are in my opinion way out of line and grossly irresponsible. There is nothing wrong with asking a broker dealer that is holding customer assets to show the public the state of their own assets, especially in light of the fact that the broker dealer in question is not showing a heck of a lot of assets as per the only independent source in the industry- the cftc reports. That's called conducting your due diligence. It isn't the only thing you should be asking or checking of course. But under the circumstances I would most definitely be asking this of firms under $5 million. So please spare us your advice to customers about "doing your research" after you have jumped all over traders who have the temerity to actually do just that.

Furthermore you told him that the money he sends in to a broker dealer is "not an investment." That statement is downright loopy. First of all it IS an investment (I guess you don't trade much do you?) Are you implying that because it is "not an investment" he has no right to ask his dealer the kinds of questions he would ask the local Furniture store he is buying a couch from?

Then you go on to state the "stories, allegations, etc.. is just window dressing." Really? It isn't window dressing to the NFA and CFTC. It is the whole reason the NFA wants to raise capital requirements in the first place. It describes a pattern of behavior that regulators want to put a stop to. This is all background information for the proposed rule change and therefore highly relevant.

I realize there are some traders who simply don't want to acknowledge the capitalization issue for whatever reason. But I will continue to insist this is a very big deal and I will continue to back up my case by citing regulatory material from the NFA and CFTC. And ForexFun if you are confused about the link between fraud and poor capitalization (which regulators are most definitely not confused about as they have said themselves) I would suggest you go reread the case of Trend Commodites. Do you really think these fraudulent firms would be fleecing customers on the one hand and on the other hand would be keeping a perfect count of their records? Of course not. That's just common sense. Why you would bring that up I have no idea. I have spent many hours going through these records. All you need to do is to take a look at the case of Trend Commodities Limited who were caught lying through their teeth about how they were meeting their capital requirement.

In any case, this debate will be settled soon enough as I suspect regulators will be rendering their final verdict on this issue very shortly.
  • #229
  • Aug 13, 2007 10:50am Aug 13, 2007 10:50am
Quoting forexsavior
A simple googling of old Udo shows him to be a member of the "2001 Rec Scuba Rogues" http://www3.sympatico.ca/johnfrancis/rogues.htm .
link fixed, had an extra period
http://www3.sympatico.ca/johnfrancis/rogues.htm
  • #230
  • Aug 13, 2007 12:22pm Aug 13, 2007 12:22pm
Meanwhile, back at the Dead Pool. The NFA appears to be wrapping up the closures of CFG and UGMFX. They released the following two press releases today regarding the regulatory actions they took against said firms. Once again both firms were very poorly capitalized and were not able to keep their books straight. Once again this is one of the reason regulators want to raise capital requirements. Once again if regulators share these concerns the trading public should as well.

NFA permanently bars Virginia forex firm, Forefront Investments Corporation
August 13, Chicago - National Futures Association (NFA) has permanently barred Forefront Investments Corporation (Forefront), a Futures Commission Merchant and Forex Dealer Member located in Richmond, Virginia, from NFA membership. The Decision, issued by NFA's Business Conduct Committee, is based on a Complaint filed in April 2007 and a settlement offer submitted by Forefront. The Complaint charged that Forefront used misleading promotional material. In addition, the Complaint charged that Forefront failed to comply with NFA financial requirements, file financial statements within a timely manner, and implement an adequate anti-money laundering program. Further, the Complaint charged that Forefront failed to have a principal also registered as an associated person (AP).

NFA permanently bars United Global Markets LLC and orders firm to pay $40,000 fine August 13, Chicago - National Futures Association (NFA) has permanently barred United Global Markets LLC (UGM), a Futures Commission Merchant and Forex Dealer Member located in Boston, Massachusetts, from NFA membership. Additionally, NFA ordered UGM to pay a $40,000 fine. The Decision, issued by NFA's Business Conduct Committee, is based on a Complaint filed in August 2007 and a settlement offer submitted by UGM. The Committee found that UGM failed to maintain the required minimum adjusted net capital. The Decision follows a recent enforcement action taken against UGM. In June 2007, NFA issued an emergency Member Responsibility Action against UGM. See previous press release.
  • #231
  • Aug 13, 2007 1:20pm Aug 13, 2007 1:20pm
good nfa keeps kicking ass.

alghouh i understand MBT/IB/these guys are at a different risk compared to market makers. im not at all worried.
{Promotion Removed}
  • #232
  • Aug 13, 2007 1:25pm Aug 13, 2007 1:25pm
Saviour:

You have indicated that persons should be concerned about problems with fraud and capitalization in the industry, principles with which I believe many people on this Board would agree. But you have indicated that regulators are not confused about fraud and poor capitalization; there is no question but that the governmental agency/agencies and industry regulatory group(s) are targeting pushing smaller FCMs out of the market.

You indicate "I would suggest you go reread the case of Trend Commodites. Do you really think these fraudulent firms would be fleecing customers on the one hand and on the other hand would be keeping a perfect count of their records? Of course not. That's just common sense. Why you would bring that up I have no idea." While I agree with your point about the importance of capitalization requirements, I read the document which you reference and it does not refer to many of the facts which you have alleged on this Board. Were customers fleeced in this case? There was no allegation nor evidence that this Company did not meet the NFA Capitalization Requirements or that customers lost money. Did customers lose money in that case? You said that the NFA ordered customer monies returned and that the NFA said that the monies were not all there. If this is the prototypical "bucket shop" which you cited before, I am not certain the NFA records support your hypothesis. As I stated, I support your belief that a higher capitalization requirement will make firms place more money into capitalization and therefore offer a higher degree of protection. Do you have more facts regarding this case than are in the NFA document to which you cited previously?
  • #233
  • Edited 2:05pm Aug 13, 2007 1:46pm | Edited 2:05pm
Quoting forexsavior
ForexFun your comments to Mr Chips are in my opinion way out of line and grossly irresponsible.
I look forward to correction on grossly irresponsible comments from the master.

Quote
There is nothing wrong with asking a broker dealer that is holding customer assets to show the public the state of their own assets
Sure, there's nothing wrong with it, and I challenge you to find where I said "You're not allowed to do that." What I said, if you bothered to read instead of firing from the hip, is that as a private business, there's nothing wrong with them telling you to "pound sand", so to speak. They don't have to show you anything. They could have perfectly legit reasons for not wanting to do so, as I pointed out from my business.

If that (asking for the books) is the extent of "research" nowadays, I weep for the state of research.

Quote
So please spare us your advice to customers about "doing your research" after you have jumped all over traders who have the temerity to actually do just that.
When is doing research solely limited to one report (which shows they are capitalized), and asking to see their books? Some of these aren't all cloak-and-dagger organizations with no trail whatsoever. There are any number of records on them - location, place of business. You could visit their offices (shoot, that's an easy one to do). You could call them. You could read up on them. You could find all sorts of information on them. I know Savior doesn't bother to, but that doesn't mean anyone else on here cannot.

There was one time in the United States and Canada that people used to not buy into a company unless it was in their local neighborhood. For my business (which I mentioned earlier), we have people who won't order from us via the internet unless they can see where we are. That's the kind of "research" I'm talking about. If you don't have the ability to do these things, I understand - you have every right not to. But you have the opportunity to do so.

Of course, this criticism is coming from the person who said he couldn't be bothered to check on the report numbers for a company that changed drastically into a second month, told people he never had any answer for the numbers changing, had to retract in part his bankruptcy claims, and said that it was their fault in the end that he was wrong.

I also was unaware that telling one person that "They don't have to show you anything" = "jumping all over the person". I'll let you have the opportunity to save face by showing exactly how I jumped all over him. Apparently, you're confused on the meaning of that phrase. I realize its difficult, because you're taking so many shellings from people on this forum, you'd think you were the USS Bismarck.

"Research" means actually doing work, not expecting the company to do it for you.

Quote
Furthermore you told him that the money he sends in to a broker dealer is "not an investment."
Not an investment in how I think of it. Anything where the money could vanish in... 10 seconds to losses and it ISN'T a natural disaster that wipes it out.... I don't consider that an investment. I spend money on a lot of things that I don't consider "investments" that are still tangible and have meaning to me.

Quote
Are you implying that because it is "not an investment" he has no right to ask his dealer the kinds of questions he would ask the local Furniture store he is buying a couch from?
Where did I ever say he has no right to ask it? I'm just saying, they have no current obligation to provide it and the NFA doesn't force them to provide it.

You ask your local furniture store to see their books? Honestly?

Quote
Then you go on to state the "stories, allegations, etc.. is just window dressing." Really?
Yes, they're tales of woe designed to elicit a fearful response, but they don't have a direct connection to the capitalization issue of five million. MOST of those tales have other issues of fraud leading to the undercapitalization, not undercapitalization leading to the fraud. They have all levels of fraud in them.

If you had some sort of statistical study where you showed a link between undercapitalization and fraud at a certain level of funding compared to overall numbers of fraud across all levels, you'd be saying something that people could dissect and analyze. But you haven't done that. You're fearmongering, and I find it distasteful.

Here's a question for you that you keep skipping over, and will be in EVERY SINGLE RESPONSE that I put on here from now on:

Do you work for a Forex company, or a company offering forex trading, ForexSavior?

Answering that one question would put a lot of people at ease as to what you're doing. If you can't answer that question, then it smells like bad fish and it looks like you're hiding something. Granted, if you lie and say you don't (if you actually did work for such a company), then you could possibly be prosecuted or NFA-member-actioned. You keep evading this question. So I'll ask it every single time from now on.

If you don't work for a forex company, I look forward to hearing it, because there seems to be some question in people's minds.

I'm with you on most of what you say in terms of due diligence, but I'm not with you on your conclusions, and the idea that these companies are required to show you their books.
  • #234
  • Aug 13, 2007 2:18pm Aug 13, 2007 2:18pm
Quoting forexfun
They don't have to show you anything. They could have perfectly legit reasons for not wanting to do so, as I pointed out from my business.
No one said that a firm should be required to disclose their financials. But there is no reason one cannot ask this question and should one not get a response I think that decision not to be transparent on the part of the broker/dealer needs to be taken into consideration by the trader.

Quoting forexfun
If that (asking for the books) is the extent of "research" nowadays, I weep for the state of research.
This line is complete nonsense ForexFun. I have NEVER said that asking for a company's financials are the only thing one should check and I challenge you to prove otherwise. In fact, in an earlier post called the "collapse of CFG" I made a half dozen other recommendations for traders when doing their due diligence. So give it a rest. Your lies grow tiresome.

Quoting forexfun
Not an investment in how I think of it. Anything where the money could vanish in... 10 seconds to losses and it ISN'T a natural disaster that wipes it out.... I don't consider that an investment. I spend money on a lot of things that I don't consider "investments" that are still tangible and have meaning to me.
ForexFun do you actually trade forex? There are plenty of traders who take long term positions (carry trade) there are other firms that offer managed funds and some traders who may hold positions without sky high leverage. In short, if your view of the forex market is that of a mini trader with a $250 account than you really need to educate yourself more on how the retail fx market works. Perhaps that means you should actually spend some time looking through the other threads on this forum before lecturing people on the fx market.

Quoting forexfun
Yes, they're tales of woe designed to elicit a fearful response, but they don't have a direct connection to the capitalization issue of five million. MOST of those tales have other issues of fraud leading to the undercapitalization, not undercapitalization leading to the fraud. They have all levels of fraud in them.
So I suppose when the NFA publishes all these stories (this is where I found them) I suppose they are trying to "scare" the public too? And I strongly disagree with you when you say these stories "don't have a direct connection to the capitalization issue of 5 million." It is BECAUSE of these stories the NFA is putting this rule in place. So I think it very important to take a hard look at the NFA's reasoning.

Fraud is not the number reason for the proposed rule change, I believe the NFA is more concerned about broker dealer insolvency. But it is an important factor. Every single one of the firms I have described had net capital well below $5 million. How much more statistical evidence do you need?

Finally, I'm getting really tired of all your charges about "witch hunts" and "fear mongering." I have laid out the same case that the regulators have laid out. But you would much rather this information stay far away from where traders regularly traffic. And as I have said before, I do not work for a forex firm. I got burned by a broker called FX First and as a result am in complete support of the regulators effort to clean up this industry. And I shall continue to do so, whether you continue to issue your veiled threats or not.
  • #235
  • Aug 13, 2007 2:21pm Aug 13, 2007 2:21pm
Quoting ForexObserv
Saviour:

You have indicated that persons should be concerned about problems with fraud and capitalization in the industry, principles with which I believe many people on this Board would agree. But you have indicated that regulators are not confused about fraud and poor capitalization; there is no question but that the governmental agency/agencies and industry regulatory group(s) are targeting pushing smaller FCMs out of the market.

You indicate "I would suggest you go reread the case of Trend Commodites. Do you really think these fraudulent firms would be fleecing customers on the one hand and on the other hand would be keeping a perfect count of their records? Of course not. That's just common sense. Why you would bring that up I have no idea." While I agree with your point about the importance of capitalization requirements, I read the document which you reference and it does not refer to many of the facts which you have alleged on this Board. Were customers fleeced in this case? There was no allegation nor evidence that this Company did not meet the NFA Capitalization Requirements or that customers lost money. Did customers lose money in that case? You said that the NFA ordered customer monies returned and that the NFA said that the monies were not all there. If this is the prototypical "bucket shop" which you cited before, I am not certain the NFA records support your hypothesis. As I stated, I support your belief that a higher capitalization requirement will make firms place more money into capitalization and therefore offer a higher degree of protection. Do you have more facts regarding this case than are in the NFA document to which you cited previously?
i'll answer you shortly
  • #236
  • Aug 13, 2007 3:06pm Aug 13, 2007 3:06pm
Go to this link and you'll see the link for the NFA's Notice of Responsibility Action.
http://www.nfa.futures.org/BasicNet/...06&contrib=NFA

In the summary on the webpage it states "This action is effective immediately and is deemed necessary to protect customers because Trend has failed to evidence its ability to comply with NFA Requirements. Further, NFA has reason to believe that Trend and its principals have made misleading and conflicting statements and representations to NFA relating to Trend's capital and ownership, financial books and records, and customer accounts."

Meanwhile, Trend was sharing the exact same suite as Forward Forex who were just formally shut down by the NFA for massive fraud:
http://www.nfa.futures.org/basicnet/...18&contrib=NFA

When Forward Forex tried to move their customers to Trend the NFA stepped in and took action because it could not verify where exactly the money to meet Trend's Capital Requirement was coming from.

Finally, on this notion that the enforcement actions I have described in this thread have nothing to do with capitalization I quote the NFA spokesman who said in FX Week: "The NFA said it has been concerned about the lack of protection for FX customers. "From what we've been seeing and the enforcement actions we've been taking recently, for the protection of the customer in the markets, we really need to raise the minimum capital requirement for these firms," said a Chicago-based NFA spokesman."
  • #237
  • Aug 13, 2007 3:49pm Aug 13, 2007 3:49pm
Quote
I have NEVER said that asking for a company's financials are the only thing one should check and I challenge you to prove otherwise.
In the specific issue we were talking about, the person who asked to see the financials, they did ask for the financials. That's what they were asking for, and that's what we were discussing.

Quote
In fact, in an earlier post called the "collapse of CFG" I made a half dozen other recommendations for traders when doing their due diligence. So give it a rest. Your lies grow tiresome.
What, like 30 posts in, after taking flak and people questioning your original stance?

Quote
There are plenty of traders who take long term positions (carry trade) there are other firms that offer managed funds and some traders who may hold positions without sky high leverage.
These people probably aren't a) the typical retail investor b) trading with these retail forex companies. But you're right, I'm not an expert, as apparently you are, so I'll defer to your greater knowledge on what they consider an investment or not. I only know what I consider an financial investment, and I wouldn't at this time consider any forex dealings I had to be one. You might disagree. I looked up several dictionary definitions of investment just to see if I was inconsistent in this regard, but they're ambiguous enough that I feel okay with my use of the word.

Quote
So I suppose when the NFA publishes all these stories (this is where I found them) I suppose they are trying to "scare" the public too?
They're not putting a spin on them like you do, nor are they linking them in a forum about capitalization, nor are they screaming that companies that are at current capitalization levels are "dead" or currently going bankrupt. They're like a news feed, you're a person taking the news feed and putting it into the context of another conversation, one that they may or may not agree with. In short, you're cherry picking evidence to make a point, they're just giving the facts without bias (or without as much bias as is possible for anyone human).

If you truly can't see the difference, then we're at an impasse.

Quote
Every single one of the firms I have described had net capital well below $5 million. How much more statistical evidence do you need?
Did you understand what I was talking about in the statistical study bit, or are you just pretending?

Let me make it clear - you're not doing a fair statistical study, you're cherry picking evidence to make a point. I think that the smaller firms probably have a greater rate of fraud. But you provide no actual evidence of that. You merely move on to the conclusion stage without any study.

Quote
And as I have said before, I do not work for a forex firm.
Thank you. You're halfway home. Answer the second part too: Do you work for a financial firm that provides forex trading or dealing in the forex.

Quote
I got burned by a broker called FX First
I'm sorry.

Quote
as a result am in complete support of the regulators effort to clean up this industry. And I shall continue to do so, whether you continue to issue your veiled threats or not.
Sigh. I'm not against your goal, just the manner in which you do it. There are people who try to stop people from cutting down trees by shooting the loggers. While I must support their goal of protecting the trees, I don't approve of their methods or the manner in which they do what they do. Do you see the difference?

And where are there "threats"? You have a serious problem with the English language if you think there's any "threat" here.

We're about 240 posts in, so only the hardcore people are reading into the middle of this thread anyways - the casual person will reach the first couple pages and the last couple pages at best..... so I'm not sure what's accomplished by talking much more here, but I look forward to the next installment.
  • #238
  • Aug 13, 2007 4:05pm Aug 13, 2007 4:05pm
Quoting forexfun
In the specific issue we were talking about, the person who asked to see the financials, they did ask for the financials. That's what they were asking for, and that's what we were discussing.
One again, I challenge you to state specifically where anyone said the only bit of research that should be done is solely asking for a firm's financial. You can't. because no one ever said it, except for you of course.

Quoting forexfun
These people probably aren't a) the typical retail investor b) trading with these retail forex companies. But you're right, I'm not an expert, as apparently you are, so I'll defer to your greater knowledge on what they consider an investment or not. I only know what I consider an financial investment, and I wouldn't at this time consider any forex dealings I had to be one. You might disagree. I looked up several dictionary definitions of investment just to see if I was inconsistent in this regard, but they're ambiguous enough that I feel okay with my use of the word.
Using a bit of sarcasm to cover up for your complete flub on this point? There is no "typical" retail investor. Many traders use different trading strategies as you can see from this trading forum. Some are long term and some are short term. But very few of them would tell you the money they have on deposit is not an investment. It may be a more high risk investment, but it is an investment nonetheless. That's why many forex firms like to use the word "investment" in their name...

Quoting forexfun
They're not putting a spin on them like you do, nor are they linking them in a forum about capitalization, nor are they screaming that companies that are at current capitalization levels are "dead" or currently going bankrupt. They're like a news feed, you're a person taking the news feed and putting it into the context of another conversation, one that they may or may not agree with. In short, you're cherry picking evidence to make a point, they're just giving the facts without bias (or without as much bias as is possible for anyone human).
oh no no no. They are doing a lot more than that. They are taking concrete action. They aren't just reporting these enforcement actions, they are proposing to raise capital requirements as a result of them. That is far more aggressive than anything I could say on a couple threads. And besides the media is saying the same thing. Currency Trader Magazine said the proposal could wipe out "90% of the industry." Sure that's scary, but doesn't mean it might not be true.

Quoting forexfun
Did you understand what I was talking about in the statistical study bit, or are you just pretending?
I don't need a statistical study. The facts are quite clear. As a result of the fraud and broker dealer insolvency regulators would like to raise the capital requirement. Again, their words... But if you want to whip up a study, be my guest.
  • #239
  • Aug 13, 2007 4:08pm Aug 13, 2007 4:08pm
Saviour:


You are correct that the summary on the webpage it states "NFA has reason to believe that Trend and its principals have made misleading and conflicting statements and representations to NFA relating to Trend's capital and ownership, financial books and records, and customer accounts." This section of the Member Responsibility Action stated that the NFA had concerns and questions regarding where the capital for the capitalization requirement came from and as to who the true owners of the company were. These were the NFA's concerns. I did not read in there that the NFA had concerns that the company was ever undercapitalized, just that it had concerns where the capital came from. I think this is in part some of the objections made by other posters which is to look simply at the amount in the capitalization account is overly simplistic. Companies may have plenty of money in the account but might have other issues; companies may have a small customer base for which their capitalization is adequate to service.

You have also stated "Meanwhile, Trend was sharing the exact same suite as Forward Forex who were just formally shut down by the NFA for massive fraud. When Forward Forex tried to move their customers to Trend the NFA stepped in and took action because it could not verify where exactly the money to meet Trend's Capital Requirement was coming from."

Where in the Member Responsibility Action did it state that "Forward Forex tried to move their customers to Trend"? I have read and re-read the NFA Publication and cannot find any reference to customers of Forward Forex being moved by Forward Forex to Trend. There is one paragraph where it states that customers of a "different FDM" were asking to have their accounts transferred to Trend. This seems to indicate that it was customers who were asking to have money moved, not an FDM to FCM requested transfer. I am just wondering where did you get that these were customers of Forward Forex who were being moved? It sounds like you have more information than is in the MRA, which would probably help us understand the due diligence which should be done.

You then stated "The NFA said it has been concerned about the lack of protection for FX customers. 'From what we've been seeing and the enforcement actions we've been taking recently, for the protection of the customer in the markets, we really need to raise the minimum capital requirement for these firms," said a Chicago-based NFA spokesman."

Once again, I do not disagree with your conclusion that the NFA is moving systemwide to crack down on firms which it believes are (1) undercapitalized (not meeting the present requirement); (2) not adequately capitalized (while meeting the current threshold do not carry an adequate capitalization set aside for the volume of customers trading at any one time); or (3) whom the NFA believes is being operated for banned or otherwise criminal characters. I am not necessarily disagreeing that capital requirements are a crucial part of the analysis which the NFA conducts and which every customer should examine before doing business with a company.

However the question remains from my earlier post as to what were the facts upon which you were arguing that customers were fleeced in the Trend case? You said that the NFA ordered customer monies returned; however I did not see that in the NFA Publication. Was that true? You asserted that customers lost money in the Trend case as a prototype for the type of fraud which is rampant in the industry and that the NFA said that the monies were not all there. I never saw any allegation in the NFA Publication that monies were found missing by the NFA or that customers did not get their money back. You must have more information than the publication indicates, which I think would help support the argument on this matter.

If this is the typical "bucket shop" which you cited before, what were the sales practices of Trend which evidenced the type of fraud which customers need to avoid? I looked at teh NFA Publication and could not find any allegation or even discussion regarding sales practices. As I stated, I support your belief that a higher capitalization requirement will make firms place more money into capitalization and therefore offer a higher degree of protection to customers. Does more capital equate to more security? As a general rule, I think we agree in the affirmative. However you have held this up as the prototype for due diligence which customers should do and what can happen to customers if they do not do their due diligence. How bad were customers hurt on this case?
  • #240
  • Aug 13, 2007 5:44pm Aug 13, 2007 5:44pm
I understand what you are saying observ. The Trend case is very confusing. The report runs for 20 pages. Trend and Forward Forex worked side by side in that suite. Forward Forex conducted the fraud. But Trend appears to have been complicit in it. The NFA describes the main principal of Forward Forex (Murias) as drawing cheques on Trend’s bank account (page 4 point 20). Furthermore, the founding principal of Trend, Guthrie, is at the center of the CFTC’s fraud action. And the NFA says point blank that when Kraus (Trend) represented that individuals affiliated with FFI had no involvement with Trend that representation was “completely false.” (Page 5, point 18)

In regards to the bulk transfer this was an incorrect assumption on my part. Let me correct the record. I assumed since they were sharing the same office and Forward Forex was going under and the principal of forward forex is drawing cheques on Trend’s account this is where the transferred accounts came from. And while that may be proved true Trend has yet to come clean about which FDM sent them the accounts, which they have not yet done and as a result the NFA has not been able to trace where the transfer came in from.(page 6)

The NFA’s concern is about the legitimacy of the funds Trend is using to capitalize itself. Are these funds legit? Where did they come from? In light of these outstanding questions the NFA is asking it is correct to conclude that Trend is not meeting their capital requirement. Should the NFA state that Trend’s funds are legit than Trend will no longer be in doubt as to the capitalization requirement for the time being anyway. But that is a hurdle they have yet to clear.

Upon closer inspection I did make a mistake regarding the NFA ordering funds be sent back. It appears Trend did this voluntarily after being pressured by the NFA as to the status of the funds in one of their bank accounts.
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