Proposed NFA Capital Requirement

Quoting jjk2

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nfa continuing to pwn.

good stuff keep it up forexsavior.


i wonder if its possible to know the capitalization of Northfinance, i know its probably impossible because they are offshore. but i wonder if they are big enough to give such huge leveraged positions 1:500.

from ODL, what can we say about other MT4 brokers? are they undercapped too ?

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Quoting AKforex

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Forexsavior

According to your posts
441
<<I have never recommended any one broker because the larger brokers all have different services that appeal to different kinds of traders. But firms like FXCM, Interbank, Oanda, GFT are all quite financially healthy and I would be comfortable trading with any of them.>>

444
<< With this in mind I have outlined a checklist for the average trader looking to find a broker:

1) Make sure they are registered with the NFA (or appropriate regulatory body such as the FSA in the United Kingdom). Avoid unlicensed firms at all costs.

2) Check the firm’s regulatory background on the NFA’s website. (http://www.nfa.futures.org/BasicNet/) Be sure to also examine the background of the principals of the firm. This is extremely important because if you see that a principal has a record of working for a bunch of firms with dodgy backgrounds then you need to seriously reconsider that firm.

3) Check the firm’s financials. (http://www.cftc.gov/tm/tmfcm.htm) Make sure the firm you are dealing with is well capitalized. This should be one of the most important criteria used in deciding on a forex broker. As I have demonstrated meeting the minimum capital requirement should not be an ending point when considering a firm since at one time or another even the most crooked outfits are reporting they are in compliance with the cap laws. Furthermore, beware investing with firms below $5 million net capital right now until the situation with the NFA proposal is sorted out. No, the rule has not passed yet but it most likely will and should that time come it is very likely that some of the firms on the dead pool list wil go under. Why put yourself through the stress of wondering whether or not your firm will be able to make the cut?

4) Test a firm’s customer service in advance. Are they open on the weekends? Do they respond quickly to emails? Do they have actual customer service 24 hours a day or just a surly dealer outside business hours who doesn’t like talking to people? Customer service with a forex firm is a lot more important than customer service with your bank as it can often times have a direct impact on your p/l.

5) Avoid “get rich quick” scams. Easily said but even though everyone knows it people still fall for them, especially in forex. Whether those scams involve some broker promising software guaranteed to make you a millionaire or some money manager saying his fund always has a positive return don’t fall for the hype. Remember, if what they said were true they would be millionaires sitting on a beach in Bermuda not sweating it out trying to get you to buy in on their scheme.

6) Experience means nothing in forex. Keep in mind this industry is only 10 years old. This isn’t the equity market where you have brokerage firms that have been around for decades. Everyone is new to forex including the brokers selling themselves to you. Don Snellgrove had more experience in this industry than almost anyone but his firm was not the better for it. Stability is what matters. And larger firms tend to be more stable because they have the capital to ride out the storms in this industry. Furthermore, many of them are backed by well established corporate partners or investors while smaller firms are mainly on their own with limited resources at their disposal.

So there you have it. Those are the lessons from the Collapse of CFG. Take them to heart and trade wisely.

The only brokers that we can trust are Oanda and GFT.

YES or NO ?

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Quoting AKforex

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You never did answer that question in my post (451) ?

Why you never write anything for the regulatory actions against big firms ?

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December 14, 2007
Dear Valued Customer:
In an effort to better serve the needs of our customers, Velocity4x is pleased to announce a new partnership with FOREX.com, a division of GAIN Capital Group. Effective Friday, December 14, 2007 at 5:00 pm ET Velocity4x will transfer all customer accounts to FOREX.com. Following the transfer of your account, FOREX.com will provide all custody, clearing and support functions.
FOREX.com has worked closely with Velocity4x to ensure the transfer of your trading account is as seamless as possible. You may continue to access the trading platform as you have in the past and utilize your existing login and password.

Trading activity in your account after December 14, 2007 will confirm your consent to be bound by the FOREX.com Customer Agreement. A link to the FOREX.com Customer Agreement is provided here for your convenience: Click here to view the FOREX.com Customer Agreement.

If you choose to close your account following the transfer, you may communicate your decision to FOREX.com directly, through email at [email protected] or telephone at 908.458.8274 and FOREX.com will honor your request and return your account balance to you.

If you have any questions regarding this transfer you may contact Velocity4x at 312.546.6288 or via e-mail at [email protected] or FOREX.com at 908.458.8274 or via e-mail at [email protected].

Through our new relationship with FOREX.com, we look forward to providing you with superior service. FOREX.com is a registered Futures Commission Merchant and a member of the National Futures Association (NFA ID# 0339826). You may also obtain additional information regarding FOREX.com and Gain Capital Group, LLC on NFA's web site.GAIN Capital's corporate headquarter address is 550 Hills Drive, Bedminster, NJ07921 and its main telephone number is 908.731.0750.

Very Truly Yours,
Velocity4x

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[b]CFTC Sues Forex Dealer One World Capital Group, LLC and Its President John Edward Walsh for Inability to Demonstrate it had Required Capital[b]
Winnetka, Illinois Forex Dealer May Owe Millions to Customers
Washington, DC – The U.S. Commodity Futures Trading
Commission (CFTC) announced today that on December 13, 2007 it sued One World Capital Group, LLC (One World) of Winnetka, Illinois, a registered futures commission merchant (FCM), and its President, John Edward Walsh of Lake Forest, Illinois, charging them with inability to demonstrate compliance with capitalization requirements and with failure to maintain required books and records.

On the same day the case was filed, the CFTC won an asset freeze and other emergency relief that will enable the Commission to freeze the assets of One World and safeguard the interests of its customers.
The complaint alleges that One World has been unable to demonstrate that it has maintained at least $1 million in adjusted net capital, the minimum requirement needed for FCMs that are Foreign Currency Dealer members of the National Futures Association (NFA).

According to the CFTC complaint, since at least November 28, 2007, One World and Walsh failed to demonstrate compliance with the net capital amount as required by the Commodity Exchange Act and CFTC regulations. As of December 10, 2007, the complaint charges, One World failed to demonstrate that it had any net assets. While One World appeared to possess $554,000 of funds held in customer accounts, since at least November 2, 2007, the NFA has been receiving complaints from customers alleging that they are unable to get their funds back from One World. The complaint alleges that the amount claimed outstanding by customers exceeds $4 million. The complaint also alleges that Walsh conceded an inability to identify all of One World’s customer liabilities. Furthermore, the complaint charges One World and Walsh with failing to maintain books and records as required by a CFTC regulation.

Quoting forexsavior

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The regulatory environment in Switzerland is a complete shambles. As such fx traders should avoid Swiss firms at all costs. The following Swiss firms are completely unregulated and by trading with these firms you risk suffering the same fate as has befallen the customers at Tradex Swiss AG. I repeat, YOU HAVE NO PROTECTIONS if you open an account with an unregulated Swiss firm.

Unregulated Swiss Brokers
Finex
Tradex Swiss AG
WestCapFX
ACM
MIG
DukasCopy
GFX Group (Forex.CH)
Crown Forex

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Quoting shrike

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As far as i know ODL and Alpari only take customers with their UK entities and thus only have to meet FSA standards. You might want to check if those 2 arent just NFA members without any clients under NFA jurisdiction.

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Quoting shrike

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As far as i know ODL and Alpari only take customers with their UK entities and thus only have to meet FSA standards. You might want to check if those 2 arent just NFA members without any clients under NFA jurisdiction.

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Feds freeze assets of Winnetka trading firm

December 19, 2007
BY DAVID ROEDER Staff Reporter

Federal regulators have obtained a court order freezing the assets of a Winnetka trading firm after customers said it denied them access to their cash.

The Commodity Futures Trading Commission sued the firm, One World Capital Group LLC, and its president, John Edward Walsh, 59, of Lake Forest. The firm specializes in foreign currency markets, allowing customers to conduct trading through specialized software.

The CFTC said that since Nov. 2, customers have reported that redemption requests exceeding $4 million have been denied. The agency, which regulates futures trading, also said One World has been unable to prove it has net capital of at least $1 million, the minimum required of foreign currency traders.

“It is true that some customer redemptions have not been satisfied,” said Kevin Flynn, an attorney representing Walsh. Flynn said his client is committed to working with the CFTC to resolve any complaints.
The firm has about 1,500 customer accounts, he said, adding that he couldn’t comment on its financial state.

The case is the third major complaint to be filed in recent months against Chicago-area trading firms. The CFTC and other agencies are investigating Sentinel Management Group Inc. and Lake Shore Asset Management Ltd. for alleged misappropriation of customer funds.

Walsh could not be reached. Records with the National Futures Association show that he started One World in 2005 after previous employment with several trading firms, including Rosenthal Collins Group LLC and Commerz Futures LLC.

The NFA also said he has been involved in three cases involving customer reparations, but details were unavailable.

Scott Williamson, deputy regional counsel for the CFTC, said the firm dealt mostly in the cash foreign exchange contract and phased out a business in futures contracts. He said Walsh may have improperly commingled customer funds with his own trading, or failed to hedge its risk.

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in 1997, in the Circuit Court of Cook County, Illinois, Martin pled guilty to the felony offense of possession of less than 15 grams of cocaine. The Notice of Intent charged that Martin's guilty plea to a felony offense disqualifies him from registration under Section 8a(3)(D) of the Commodity Exchange Act ("Act").

In addition, the Notice of Intent alleged that in 2000, also in Cook County, Illinois, Martin pled guilty to and was found guilty of the misdemeanor offense of theft. The Notice of Intent charged that Martin's guilty plea to and conviction of a misdemeanor offense involving theft disqualifies him from registration under Section 8a(3)(E)(iii) of the Act.

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CFTC Sues Futures Commission Merchant Forex Liquidity LLC Alleging Undercapitalization in Excess of $11.6 Million

Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) announced today that on December 13, 2007, it sued Forex Liquidity LLC (Forex Liquidity), a registered Futures Commission Merchant (FCM) in Santa Ana, California, charging it with being undercapitalized in excess of $11.6 million and also with failing to maintain required books and records.

On December 14, 2007, the CFTC won an asset freeze and other emergency relief that will enable the Commission to freeze the remaining assets of Forex Liquidity and safeguard the interests of its customers.

According to the CFTC complaint, as of November 30, 2007, and perhaps earlier, Forex Liquidity’s net capitalization was below the minimum required by the Commission. As a Forex Dealer Member of the National Futures Association (NFA) offering to be the counterparty to retail customer foreign currency transactions, Forex Liquidity is required to have a minimum adjusted net capital of $1 million; instead, according to the complaint, as of December 7, 2007, it had an adjusted net capital deficit of approximately $11.6 million.

Forex Liquidity is also alleged to have been unable to produce required financial documentation regarding its assets and liabilities. For example, according to the CFTC’s complaint, Forex Liquidity represented in reports and discussions with NFA that its assets at one time included a $35 million ABN-AMRO bond located in Switzerland. The complaint further alleges that Forex Liquidity represented to the NFA that the ABN-AMRO bond (or its proceeds) were transferred to a U.S. registered broker dealer, Commonwealth Financial Network (CFN); however, CFN does not have an account for Forex Liquidity and the account number that the defendant provided to NFA was fictitious.
Accordingly, the CFTC also charged Forex Liquidity with failure to maintain books and records of its business transactions, specifically, current ledgers that accurately reflect its assets and liabilities.

In the ongoing action in the U.S. District Court for the Central District of California, the CFTC seeks an order of permanent injunction against the defendant, monetary penalties, and other relief. The Honorable Cormac J. Carney, U.S. District Judge, issued the restraining order freezing the assets of Forex Liquidity and prohibiting the defendant from destroying documents or denying CFTC staff access to books and records.

Quoting indianguyinny24

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Well after seeing all this thread question comes which is the broker which has sufficient Fund, ForexSaviour has given Info regarding all the brokers.

So which broker one should go to any inputs.

Thanks

Vick

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Quoting indianguyinny24

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Well after seeing all this thread question comes which is the broker which has sufficient Fund, ForexSaviour has given Info regarding all the brokers.


So which broker one should go to any inputs.


Thanks

Vick

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Quoting jjk2

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forexsavior, what is ur outlook on dec 21.

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