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Forex.com trader worried

  • #1
  • First Post: Jan 6, 2007 10:00am Jan 6, 2007 10:00am
NOTE: I posted this on another site but found forexfactory.com yesterday and was excited to see people actually discussing forex

I am relatively new to the forex market and have a $5,000 account with forex.com. One of my trading buddies who uses another broker said that forex.com was in trouble and I should move my money. I looked at the N.F.A. web site and they have a case against them (from the N.F.A.). I am worried about what could happen. Does anybody know if the N.F.A has a history of shutting down forex companies for misconduct, and what would happen to my money?

The complaint says "On December 8, 2006, NFA issued a Complaint charging GCG with using deficient promotional material and failing to uphold high standards of commercial honor and just and equitable principles of trade; failing to establish and implement an adequate anti-money laundering program; and failing to notify NFA that GCG was carrying customer accounts."

http://www.nfa.futures.org/basicnet/...spx?seqnum=970

I would not be so worried if I had not read about all of the people that are stuck with the Ref Co scandal.

Any input on if I should worry and move would be appreciated!
  • #2
  • Jan 6, 2007 1:25pm Jan 6, 2007 1:25pm
Personally I withdrew all my money yesterday...
Why even risk it?
Besides, LOTS of brokers can do better then a 5 pip spread on GBP...
  • #3
  • Jan 6, 2007 1:56pm Jan 6, 2007 1:56pm
So do you think it would be wise for me to move my money soon? My salesperson is a nice guy, but now I feel like he wasn't even qualified to sell me something. That doesn't give me a whole lot of confidence.
  • #4
  • Edited 2:48pm Jan 6, 2007 1:59pm | Edited 2:48pm
Well mate I would look up all the brokers and you'll probally find that most of em at some point in time have a case... The NFA is alwasy changing the rules as they see fit... FXCM had case about a year ago and they are still operation...

I have not read this case yet but I would bet its for inmproper sales from there New York office.. cause that is is just a call center and when people who only make comm. well they will say just about anything to close a deal

But on a personal note I would change broker for other reasons even before that like execution and spread...lol

turbo
  • #5
  • Jan 6, 2007 3:24pm Jan 6, 2007 3:24pm
Quoting turbokaos
I have not read this case yet....
turbo
Thanks for not letting facts get in the way of rendering your opinion.
  • #6
  • Jan 6, 2007 3:46pm Jan 6, 2007 3:46pm
Good comment Phimcgrew. I read the whole thing and I think I will move. Of course, I may have more passion about this than turbokaos because I have money involved.

As far as price and execution, I have found it to be fine, but then again I'm not looking for bottom barrel discount Walmart broker, just a trustworthy one that I can depend on.

Anyone read the case and have any suggestions?

Quoting philmcgrew
Thanks for not letting facts get in the way of rendering your opinion.
  • #7
  • Edited 10:35pm Jan 6, 2007 3:50pm | Edited 10:35pm
After reading the report it is the same thing FXCM recived and if I rember correct they had to pay a fine of something like $110,000.

I would say the Refco situation was a little diff... In way refco was really any ofshore company and when thing started to go bad they packed up and ran for the hills.

If you need the report the NFA makes it sound like they just found out the other day GAIN Capital aka Forex.com was selling FOREX....Give me a break

I have a feeling you will be seeing more of this for other firms becasue they all use to pretty much word everything thing the say way ie: guaranteed fills, no slipage ect.

turbo
  • #8
  • Jan 6, 2007 3:52pm Jan 6, 2007 3:52pm
Quoting Gumbytrader2
Good comment Phimcgrew. I read the whole thing and I think I will move. Of course, I may have more passion about this than turbokaos because I have money involved.


As far as price and execution, I have found it to be fine, but then again I'm not looking for bottom barrel discount Walmart broker, just a trustworthy one that I can depend on.

Anyone read the case and have any suggestions?
Well acutally Gumby... I do have a Gain Capital account w/ about 10k in it that i use for testing things like the RSS lol... But do my main trading w/ ODL Prime

turbo
  • #9
  • Jan 6, 2007 4:10pm Jan 6, 2007 4:10pm
Quoting Gumbytrader2
Anyone read the case and have any suggestions?
I read the report, have several Gain accounts and know many others who also trade through them. I agree with turbo, the NFA saying that they did not know a company had 16,000 accounts and made $50 million is a joke. Someone should fine the NFA is that was really true. Much of the deceptive comments made where from IBs associated with Gain and not Gain themselves. For a period of time, I think they let their IBs get out of hand without monitoring them. I can tell you firsthand they have taken steps to correct that with a strict quarterly auditing program.

As for making claims that aren't true and not having an anti-laundering program, well shame on them. There is no defense for that. I'm not sure deceptive advertising in Forex warrants pulling accounts from Gain. Sadly, it's just one of the many oxymorons in trading. Brokers should be selected on speed, spread, reliability, customer service, slippage, commissions, the whole dealing vs. non-dealing argument, and anything else I forgot. If you opened a Gain account because some IB somewhere said you could make 600% then you've probably already realized that wasn't true. Or, maybe it was and you've already retired.

Brokers who hand out IB status like it was halloween candy are responsible for what their IB's say unless that IB is also registered with the NFA at which point they are responsible directly to the NFA. That is why many FCMs require their IB's to be registered and many more will in the future.
  • #10
  • Jan 6, 2007 4:22pm Jan 6, 2007 4:22pm
Quoting philmcgrew
I read the report, have several Gain accounts and know many others who also trade through them. I agree with turbo, the NFA saying that they did not know a company had 16,000 accounts and made $50 million is a joke. Someone should fine the NFA is that was really true.
Especially since GAIN first reg w/ the NFA back in 2001...lol
http://www.nfa.futures.org/basicnet/...m=GAIN+CAPITAL

turbo
  • #11
  • Jan 6, 2007 6:35pm Jan 6, 2007 6:35pm
The way I read the case, it isn't that they didn't know they were in the forex business, it is that the company basically was trading with the wrong corporate entity they had set up. Therefore, the sales people are supposed to be registered and aren't. Do you think this really comes down as a slap on the wrist, or will it lead to issues with the company being able to operate. It gets a little too much in to the legal stuff at that point.

BTW: Why would you have a 10,000 account to test an RSS feed? Or are you using multiple brokers for better charting, etc. Just wondering.
  • #12
  • Jan 6, 2007 8:02pm Jan 6, 2007 8:02pm
Quoting philmcgrew
I read the report, have several Gain accounts and know many others who also trade through them. I agree with turbo, the NFA saying that they did not know a company had 16,000 accounts and made $50 million is a joke. Someone should fine the NFA is that was really true. Much of the deceptive comments made where from IBs associated with Gain and not Gain themselves. For a period of time, I think they let their IBs get out of hand without monitoring them. I can tell you firsthand they have taken steps to correct that with a strict quarterly auditing program.

As for making claims that aren't true and not having an anti-laundering program, well shame on them. There is no defense for that. I'm not sure deceptive advertising in Forex warrants pulling accounts from Gain. Sadly, it's just one of the many oxymorons in trading. Brokers should be selected on speed, spread, reliability, customer service, slippage, commissions, the whole dealing vs. non-dealing argument, and anything else I forgot. If you opened a Gain account because some IB somewhere said you could make 600% then you've probably already realized that wasn't true. Or, maybe it was and you've already retired.

Brokers who hand out IB status like it was halloween candy are responsible for what their IB's say unless that IB is also registered with the NFA at which point they are responsible directly to the NFA. That is why many FCMs require their IB's to be registered and many more will in the future.

What about self-regulation of forex companies especially those who want to be seen as respectable through affiliation with regulatory bodies such as the NFA? During all this time GCG aka Forex.com should or must have been aware of all this deceptive advertising whether made by themselves or their representatives. And they did nothing about it until the NFA found out. May be they thought they could get away with it. Careless and reckless conduct really.
  • #13
  • Jan 6, 2007 10:31pm Jan 6, 2007 10:31pm
Like I said this is nothing new FXCM was fined already for the exact same stuff I couldn't find the link before but here it is:

http://www.nfa.futures.org/basicnet/...25&contrib=NFA

turbo
  • #14
  • Jan 6, 2007 10:33pm Jan 6, 2007 10:33pm
Quoting Gumbytrader2
The way I read the case, it isn't that they didn't know they were in the forex business, it is that the company basically was trading with the wrong corporate entity they had set up. Therefore, the sales people are supposed to be registered and aren't. Do you think this really comes down as a slap on the wrist, or will it lead to issues with the company being able to operate. It gets a little too much in to the legal stuff at that point.

BTW: Why would you have a 10,000 account to test an RSS feed? Or are you using multiple brokers for better charting, etc. Just wondering.
LOL sorry not RRS feed.. but sily single provider product so i can review it for my site.

testing test in a demo account don't tell you anything

turbo
  • #15
  • Jan 6, 2007 11:15pm Jan 6, 2007 11:15pm
danger will robinson danger
  • #16
  • Jan 7, 2007 9:03am Jan 7, 2007 9:03am
Aha! That makes more sense than RSS news.

Gain Capital has until tomorrow to respond to the case. Does anyone know, with a case, does the response get posted pretty quickly or is it private information?

Quoting turbokaos
LOL sorry not RRS feed.. but sily single provider product so i can review it for my site.

testing test in a demo account don't tell you anything

turbo
  • #17
  • Jan 7, 2007 6:14pm Jan 7, 2007 6:14pm
Quoting Gumbytrader2
So do you think it would be wise for me to move my money soon? My salesperson is a nice guy, but now I feel like he wasn't even qualified to sell me something. That doesn't give me a whole lot of confidence.
Move your money. Are you willing to give up $5000 because you feel indifferent? Even though the saleperson is a nice guy, do you think he could care less what happens to your account? If they go under, do you think he will give you $5000 to compensate your loss? Hell no!! You got to look out for yourself, no one else will. Everyone salesperson wants to make a sale and once they catch you, you wouldn't even get a call from them not unless they want to sell to you again...
  • #18
  • Jan 7, 2007 6:40pm Jan 7, 2007 6:40pm
I'm not going to loose any sleep over it. But if it it is on your mind that much you should deff have already sent in your with drawl form...

But I think you will be seeing more FCM getting these notice becasue they all use to all have the same verbage..

turbo
  • #19
  • Jan 7, 2007 6:43pm Jan 7, 2007 6:43pm
Quoting et_phonehome_2
Move your money. Are you willing to give up $5000 because you feel indifferent? Even though the saleperson is a nice guy, do you think he could care less what happens to your account? If they go under, do you think he will give you $5000 to compensate your loss? Hell no!! You got to look out for yourself, no one else will. Everyone salesperson wants to make a sale and once they catch you, you wouldn't even get a call from them not unless they want to sell to you again...
If you want to move your money then do it and get it over with. But don't make the mistake of thinking a forex salesperson gives a crap about your success. You already elected to give them your money so clearly that wasn't a deciding factor in selecting a broker. The relationship you establish is between you and your broker. Not some punk who answers the phone when you call for more information. Worrying about a salesperson who will love you back is a huge distraction that is delaying your advancement as a trader.
  • #20
  • Last Post: Jan 8, 2007 6:14am Jan 8, 2007 6:14am
Thanks for the help. I think I'll be reading some of the other forums and seeking out a new broker today!
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