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Proposed NFA Capital Requirement

  • #421
  • Oct 5, 2007 6:34am Oct 5, 2007 6:34am
That is very very bad for 1worldfx customers.. Are they giving any reasons for these delays? do customers have any idea when or indeed if they will see their funds??
  • #422
  • Oct 5, 2007 9:18am Oct 5, 2007 9:18am
The new capital numbers are out. Here is the most comprehensive list available of the industry's financial status. I have included every single registered Forex Dealer Member and listed their Adjusted Net Capital. Since I first started posting about the NFA proposal over a dozen firms have gone out of business. Two others have merged and several others are staring death in the face. Here is the direct link for the CFTC capital reports: http://www.cftc.gov/marketreports/financialdataforfcms/

Firms Under $5 Million
All these smaller firms are reporting adjusted net capital below the $5 million mark as of the latest CFTC report. Some should be able to raise the necessary capital. Others clearly will not. Which ones can and cannot will be anybody's guess. Already one of these firms, One World Capital, is not allowing customers to withdraw money.

Hamilton Williams ($1,100,000)
IG Financial Markets ($1,014,000)
One World Capital ($1,170,000)
Wall Street Derivatives ($1,237,000)
SNC Investments ($1,247,000)
Advanced Markets ($1,269,000)
Direct Forex ($1,406,000)
Solid Gold Financial ($2,010,000)
CMC Markets ($2,806,000)
E FX Options ($3,055,000)
Forex Club ($3,308,000)
GFS Futures & Forex ($3,403,000)
MB Trading ($4,452,000)
Easy Forex ($4,628,000)

Firms Under $20 Million
These medium sized firms all meet the coming minimum adjusted net capital requirement. However, there are other capital requirements that as market makers these firms will need to meet in addition to the minimum $5 million. Most firms will likely need $10 million to be in compliance with the NFA's rules. Clearly firms like Money Garden are not in the clear just yet.

Money Garden ($5,505,000)
HotSpot FX ($6,023,000)
I Trade FX LLC ($6,645,000)
IKon ($6,736,000)
IFX Markets ($9,078,000)
CMS Forex ($11,255,000)
ODL Securities ($12,642,000)
PFG Forex ($14,742,000)

Firms Over $20 Million
These are the most well capitalized firms in the industry and two years from now may very well be the only firms left in the industry if Dan Roth and the NFA have their way and increase cap requirements to $20 million.

FX Solutions ($23,062,000)
Interbank FX ($27,110,000)
Gain Capital (36,679,000)
Forex Liquidity ($38,317,000)
GFT Forex ($48,302,000)
FXCM ($60,268,000)
Oanda ($156,467,000)

Firms No Longer in Business
These are the firms that have gone out of business since I began posting on the forum. That's a quarter of the industry in just a few months. And one of those firms, Nations LLC, has gone into bankruptcy and customers can't get their money back- and may never get their money back.

Bacera Corporation
Cal Financial Corporation
FiniFX
Forward Forex
FX Option1 Inc.
Nations Investments
Performance Capital International
Spencer Financial
Tradex Swiss AG
Trend Commodities
United Global Markets
Worldwide Clearing

Firms that Merged
These are the firms that could not make the new capital requirement on their own and decided to merge with larger players as a result.

American National Trading Corp (Merged with PFG)
Royal Forex Trading (Merging with IKON)

Summary
It is a very turbulent time in the forex industry. My advice is what it has always been, do not trade with a poorly capitalized firm. And if you must, at least wait until after the December 17, 2007, deadline before putting any money on deposit with any firm that is not meeting the current minimum capital requirement.
  • #423
  • Oct 5, 2007 9:42am Oct 5, 2007 9:42am
i was trading the news there, so when i asked for withdraw 7 days left nothing happens.

i contact them, they says you was trading the news so your account in hold !

till now didnt get the profit, even the initial deposit too didnt get it.

Quoting peterM
That is very very bad for 1worldfx customers.. Are they giving any reasons for these delays? do customers have any idea when or indeed if they will see their funds??
Charting Markets into the Future...MǎҖ€¥.
  • #424
  • Oct 5, 2007 10:23am Oct 5, 2007 10:23am
damn oanda is showing over $150 million, this firms get all there business from word of mouth, i never seen one advertisment from these guys.
If I Go Broke Trying Then I Will die happy.
  • #425
  • Oct 5, 2007 1:47pm Oct 5, 2007 1:47pm
Quoting Moe
damn oanda is showing over $150 million, this firms get all there business from word of mouth, i never seen one advertisment from these guys.
Oanda just sold a piece of their company for $100 million.
FXChant Singing the World of Forex
  • #426
  • Oct 5, 2007 1:49pm Oct 5, 2007 1:49pm
Quoting forexsavior
The new capital numbers are out. Here is the most comprehensive list available of the industry's financial status. I have included every single registered Forex Dealer Member and listed their Adjusted Net Capital. Since I first started posting about the NFA proposal over a dozen firms have gone out of business. Two others have merged and several others are staring death in the face. Here is the direct link for the CFTC capital reports: http://www.cftc.gov/marketreports/financialdataforfcms/

Firms Under $5 Million
All these smaller firms are reporting adjusted net capital below the $5 million mark as of the latest CFTC report. Some should be able to raise the necessary capital. Others clearly will not. Which ones can and cannot will be anybody's guess. Already one of these firms, One World Capital, is not allowing customers to withdraw money.

Hamilton Williams ($1,100,000)
IG Financial Markets ($1,014,000)
One World Capital ($1,170,000)
Wall Street Derivatives ($1,237,000)
SNC Investments ($1,247,000)
Advanced Markets ($1,269,000)
Direct Forex ($1,406,000)
Solid Gold Financial ($2,010,000)
CMC Markets ($2,806,000)
E FX Options ($3,055,000)
Forex Club ($3,308,000)
GFS Futures & Forex ($3,403,000)
MB Trading ($4,452,000)
Easy Forex ($4,628,000)
And these numbers are actually from the end of August (reports take over a month to be posted to the CFTC site). MB Trading already at $4.5 million. What a shocker! Any thoughts, forexsavior, as to whether they will be able to show $5 million by the end of December?
FXChant Singing the World of Forex
  • #427
  • Oct 5, 2007 2:52pm Oct 5, 2007 2:52pm
the 7 firms that showing over $20 million has clearly position them self for the future, i do think odl and ifx markets or bigger then what there showing.
If I Go Broke Trying Then I Will die happy.
  • #428
  • Oct 5, 2007 2:57pm Oct 5, 2007 2:57pm
Quoting forexsavior

Firms Under $5 Million
All these smaller firms are reporting adjusted net capital below the $5 million mark as of the latest CFTC report. Some should be able to raise the necessary capital. Others clearly will not. Which ones can and cannot will be anybody's guess. Already one of these firms, One World Capital, is not allowing customers to withdraw money.

Hamilton Williams ($1,100,000)
IG Financial Markets ($1,014,000)
One World Capital ($1,170,000)
Wall Street Derivatives ($1,237,000)
SNC Investments ($1,247,000)
Advanced Markets ($1,269,000)
Direct Forex ($1,406,000)
Solid Gold Financial ($2,010,000)
CMC Markets ($2,806,000)
E FX Options ($3,055,000)
Forex Club ($3,308,000)
GFS Futures & Forex ($3,403,000)
MB Trading ($4,452,000)
Easy Forex ($4,628,000)
Who Knows if MB Trading will have the money or not FX Chant. Their capital numbers wildly fluctuate from one report to the next. But as of right now they don't meet the minimum requirement. My advice to traders is the same, don't trade with a firm unless the firm shows they have the financial resources to be in this business for the long term.
  • #429
  • Oct 5, 2007 4:07pm Oct 5, 2007 4:07pm
Maybe we see a few mergers before the deadline if some can't make the requirements.. seems there are a few that would have to increase by 4x.
  • #430
  • Oct 5, 2007 4:25pm Oct 5, 2007 4:25pm
Quoting Moe
damn oanda is showing over $150 million, this firms get all there business from word of mouth, i never seen one advertisment from these guys.
Back when Refco was still alive, I thought of switching to them but got quite put by how much they advertised - I think in this business brokers that solicit heavily seem to be a bit of bad news...Sort of like lawyers
  • #431
  • Oct 5, 2007 5:06pm Oct 5, 2007 5:06pm
Is V4X hamilton williams? I used to have an account with them.
  • #432
  • Oct 8, 2007 10:43am Oct 8, 2007 10:43am
Quoting HalifaxCB
Back when Refco was still alive, I thought of switching to them but got quite put by how much they advertised - I think in this business brokers that solicit heavily seem to be a bit of bad news...Sort of like lawyers
While true, it also stands to reason that a smaller company would have to advertise more also in order to build up their business, so I'm not sure how much you can base on advertising.
  • #433
  • Oct 8, 2007 1:04pm Oct 8, 2007 1:04pm
oh man MBT ??? should i get out now ? im damn worried. i thought this was a big company


props to forexsavior for his hard work!
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  • #434
  • Edited 7:08am Oct 9, 2007 6:56am | Edited 7:08am
Quoting jjk2
oh man MBT ??? should i get out now ? im damn worried. i thought this was a big company
I'm not too worried about it since mb's business is bigger than FX. That said, I'm still sitting on most of my trading capital. I don't want to sent it somewhere and then have problems. So I'm waitin.

* found the 20 mil link:

http://www.nfa.futures.org/news/news...ArticleID=1968

"Congress should amend Section 2(c) of the Act to require FCMs acting as counterparties to retail forex transactions to maintain minimum capital of at least $20 million. NFA has raised the capital requirements for forex dealers several times but this congressional action could ensure that firms can meet their obligations to their customers and have a significant financial stake in their business."

That's pretty clear, and trying to take it through congressional ammendment no less! Yikes lol!
  • #435
  • Oct 9, 2007 1:39pm Oct 9, 2007 1:39pm
The Boston Business Journal ran another article on the shenanigans going on over at Tradex Swiss Ag:
http://boston.bizjournals.com/boston...08/story3.html

Like most Swiss firms Tradex Swiss AG is not regulated and customers have been burned as a result. Please note the following Swiss firms ARE NOT REGULATED and should be avoided lest you end up like the poor sods at Tradex Swiss AG:

ACM
Dukascopy
WestCapFX
MIG
GFX Group (Forex.CH)
Crown Forex

Immigrants trapped in forex mess
by Jackie Noblett Journal staff

Z. Song was amazed by the size of her friend's new house. The Westford resident asked her friend, who never had a full-time job, how she and her husband were able to buy their new home in Acton. The friend said her husband invested money with Tradex Swiss AG, a Boston money manager that specialized in foreign exchange trading. Song recalls being told she should trade, too.

"They would never lose money, always make big money," Song said in an interview.

Little did Song know that her friend's husband, David Qi, was getting paid, according to his lawyer, to refer friends to the unregistered forex trading company. Song also maintains she had no idea that, just three months after her initial investment, her money would be locked up in a legal battle involving Tradex and its regulators. Tradex is now being investigated by governments on both sides of the Atlantic for trading currency without being properly registered, and over $4 million in investment accounts hangs in the balance.

The rest of the article requires a subscription but essentially contains tales of misery and woe from traders whose funds are frozen in the shuttered swiss brokerage. Of interest in this sordid tale are the actions of Tradex salesmen who were STILL soliciting customers to trade even as Tradex was going under!

Quote
In the midst of the investigation, email communications provided to the Boston Business Journal by former Tradex investors show that company continued to solicit business from customers.

A July 25 e-mail from a Tradex broker said that the operation had opened an account at Sovereign Bank for future trading. "In the future, please wire your fund to this account," the e-mail states.

So basically Tradex was encouraging traders to purchase tickets on the Titanic right after it had struck an iceberg. Talk about a complete lack of ethics.

This is a very important point to remember. Small forex brokers that are in financial trouble rarely let customers know they are in trouble ahead of time. Indeed, as Tradex shows, they will go so far as to cover up that trouble to their own customers and encourage them to keep sending in money even when all is lost.

This is why traders should never invest money with a poorly capitalized/unregulated firm. These firms can unwind rapidly and by the time the average trader finds out it is way too late to do anything about it.
  • #436
  • Oct 10, 2007 11:20am Oct 10, 2007 11:20am
Well the folks over at IKon can't be too happy with the news that the NFA has filed suit against RFXT and accused them of fraud in a new complaint:
http://www.nfa.futures.org/BasicNet/...28&contrib=NFA

IKon recently merged with former Dead Pool Member Royal Forex Trading and on RFXT's website they are listed as being a "division of IKon Global Markets."

So how does IKon feel about a division of its company being charged with the following:
"CHEAT, DEFRAUD, DECEIVE FOREX CUSTOMERS"

The NFA summarizes their complaint as follows:

Quote
On September 14, 2007, NFA issued a Complaint charging Royal with using misleading and fraudulent promotional material; failing to uphold high standards of commercial honor and just and equitable principles of trade; and failure to collect and maintain the required security deposit. The Complaint also charged Royal and Marsch with failure to supervise.

Perhaps the most illuminating aspect of the NFA Complaint against RFXT is this doozy about how Royal Forex clears its trades. NFA cites an IB that RFXT uses and in the process reveals how RFXT clears its trades:

Quote
InterBank Group's website also contained statements that falsely implied that customers would be trading in the interbank market. For example, the website included such claims as, "InterBank Group clients routinely benefit from the size and strength of one of the world's largest online foreign exchange providers," and "with access to over $1 billion in liquidity from the world's top FX banks, InterBank Group is able to pass along bank level pricing to our clients through our clearing firms."

In reality, customers hardly enjoy "bank level pricing" as InterBank Group widens the spreads from the prices that it receives from Royal by as much as 39 pips. Further, Royal offsets its forex exposure with IFX Markets, Inc., an NFA Member FDM, which in turn offsets its exposure with IFX Markets, Ltd. Thus, it was misleading for InterBank Group to suggest that its customers receive the same prices that banks and other institutions do, as the spread InterBank Group charges its customers is widened from the spread on prices that IFX Ltd. receives from its counterparties.

Lol! This is another downside of trading with poorly capitalized firms. Firms like RFXT do not have the kind of trade volume needed to get access to the best prices in the interbank market (although that doesn't stop these same firms from exagerrating their access to "interbank pricing.")

As it stands Royal Forex trading is clearing its trades through IFX? How on earth are you going to get good pricing trading with RFXT when they have to go cup in hand to one of their competitors to get their quotes? Why can't RFXT get a line of credit with a bank like the larger players get? The fact that they can't should send up red flags that these firms are far riskier to trade with than the more well established players.

The more you learn about how smaller forex firms operate (the fraud, the insolvency, the lousy pricing) the more traders should thank their lucky stars the NFA has raised capital requirements to $5 million because this industry is badly in need on an enema.
  • #437
  • Oct 10, 2007 12:33pm Oct 10, 2007 12:33pm
Forexsavior

Which is the subject of this thread? fraud or capitalization ?

Let's see all the regulatory actions against the brokers the last month:

1) 27/09/2007 FXCM: http://www.nfa.futures.org/basicnet/...46&contrib=NFA , http://www.nfa.futures.org/basicnet/...46&contrib=NFA,

2) 26/09/2007 ODL SECURITIES INC : http://www.nfa.futures.org/news/news...ArticleID=1967

3)24/09/2007 INTERBANK FX LLC: http://www.nfa.futures.org/news/news...ArticleID=1966
  • #438
  • Oct 10, 2007 6:15pm Oct 10, 2007 6:15pm
Quoting forexsavior
Well the folks over at IKon can't be too happy with the news that the NFA has filed suit against RFXT and accused them of fraud in a new complaint:
http://www.nfa.futures.org/BasicNet/...28&contrib=NFA

IKon recently merged with former Dead Pool Member Royal Forex Trading and on RFXT's website they are listed as being a "division of IKon Global Markets."

So how does IKon feel about a division of its company being charged with the following:
"CHEAT, DEFRAUD, DECEIVE FOREX CUSTOMERS"

The NFA summarizes their complaint as follows:



Perhaps the most illuminating aspect of the NFA Complaint against RFXT is this doozy about how Royal Forex clears its trades. NFA cites an IB that RFXT uses and in the process reveals how RFXT clears its trades:



Lol! This is another downside of trading with poorly capitalized firms. Firms like RFXT do not have the kind of trade volume needed to get access to the best prices in the interbank market (although that doesn't stop these same firms from exagerrating their access to "interbank pricing.")

As it stands Royal Forex trading is clearing its trades through IFX? How on earth are you going to get good pricing trading with RFXT when they have to go cup in hand to one of their competitors to get their quotes? Why can't RFXT get a line of credit with a bank like the larger players get? The fact that they can't should send up red flags that these firms are far riskier to trade with than the more well established players.

The more you learn about how smaller forex firms operate (the fraud, the insolvency, the lousy pricing) the more traders should thank their lucky stars the NFA has raised capital requirements to $5 million because this industry is badly in need on an enema.

another great rebuttal.

u know i remember rxft being at the top with 5 stars @ forexbastards.com

I phoned them, and i couldn't understand why rxft had such high ratings, because after the phone conversation with the "customer service" it kinda made it clear this company wasn't serious.

and i mistrust forexbastards even a greater deal now.


keep up the goodwork forexsavior, we have to cut out and elimiate these small timer bucketshops, and let everyone knowl
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  • #439
  • Oct 11, 2007 10:33am Oct 11, 2007 10:33am
Again, this thread focuses on poorly capitalized firms. Why? Because poorly capitalized firms are the source of most of the industry's problems. What are those problems? As I have demonstrated in this thread poorly capitalized forex dealer members have gone out of business in record numbers this year mainly due to fraud and/or insolvency. Poorly capitalized firms do not have large compliance or accounting budgets which is what scares the NFA and is one of the main reasons the NFA wants to weed them out of the industry altogether.

And as this latest regulatory action demonstrates poorly capitalized firms are in no position to give their customers good prices when they themselves don't get good prices. Of course a lot of the larger firms have been cited by the NFA. But none of those large firms are getting cited for not meeting their capital requirement. Nor have we heard that they are clearing their trades through IFX as we have just found out with Royal Forex Trading! There's nothing wrong with IFX of course, but the point is why the hell would you trade with RFXT when you can just cut them out and trade with IFX directly and save yourself some money?

With each passing day the argument for trading with a poorly capitalized firm is being completely debunked. In fact, it doesn't even need to be debunked anymore since the NFA is going prevent customers from trading with these kinds of firms come December. At this point all I am doing is merely providing the background information as to why the NFA wants to do it.

With two months to go the following firms have still not met the $5 million minimum threshold. The next Cap report comes out the first week of November:

Hamilton Williams ($1,100,000)
IG Financial Markets ($1,014,000)
One World Capital ($1,170,000)
Wall Street Derivatives ($1,237,000)
SNC Investments ($1,247,000)
Advanced Markets ($1,269,000)
Direct Forex ($1,406,000)
Solid Gold Financial ($2,010,000)
CMC Markets ($2,806,000)
E FX Options ($3,055,000)
Forex Club ($3,308,000)
GFS Futures & Forex ($3,403,000)
MB Trading ($4,452,000)
Easy Forex ($4,628,000)
  • #440
  • Oct 11, 2007 12:14pm Oct 11, 2007 12:14pm
Forexsavior

What's your opinion for FXCM ?
Which Broker do you recommend ?
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