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Proposed NFA Capital Requirement

  • #881
  • Jun 24, 2008 9:16am Jun 24, 2008 9:16am
it looks like the principals of ikon left coesfx by January of 2003. Coesfx ran for another 3 1/2 years before they were shut down in 2006. I dont think they had anything to do with defauding customers, especially when they were running their own fcm ikon during that time, which they registered in march of 2003.
  • #882
  • Jun 24, 2008 9:51am Jun 24, 2008 9:51am
Quoting forexsavior
There so much technical BS in this statement it is hard to say exactly what RCG is doing. It appears RCG is now referring customers to IKon? Key question is where is the money going?
Obviously, you forgot your BS for itradefx and MB Trading
  • #883
  • Jun 24, 2008 11:33am Jun 24, 2008 11:33am
Quoting AKforex
Obviously, you forgot your BS for itradefx and MB Trading
Don't be hating AK. You want me on that wall. You NEED me on that wall.
  • #884
  • Jun 24, 2008 12:29pm Jun 24, 2008 12:29pm
Quoting forexsavior
Don't be hating AK. You want me on that wall. You NEED me on that wall.
I don't have problem with you but with your posts and i don't need you. Obviously you need all the forex forums for your agenda.
  • #885
  • Jun 24, 2008 1:31pm Jun 24, 2008 1:31pm
Quoting AKforex
Obviously, you forgot your BS for itradefx and MB Trading
Which BS was that? I'm infinitely curious if its something that I missed or if I knew about it already.
  • #886
  • Jun 24, 2008 2:30pm Jun 24, 2008 2:30pm
Quoting ck_itrade
Which BS was that? I'm infinitely curious if its something that I missed or if I knew about it already.
Post 20 by forexsavior: I Trade FX (-$3,039,000!!!!! Close to Bankruptcy!!!!)

Post 47 by forexfun: According to the current month month, I Trade FX has positive 3 million+ in capital. Was the previous month a misprint?

Post 82 by Merlin: forexsavior, do you have an answer to this?
maybe this has to do with thier recent acquisition?

Post 83 by forexsavior: Nope. I don't have an answer. And that's what so disturbing. The CFTC is not in the habit of making mistakes on their reports. And you better believe if it was a mistake I Trade FX would have been screaming bloody murder that they fix the mistake. So what it looks like is that I Trade FX was trying to digest some kind of finanical irregularity the previous month. Ok, they are not ready to go bankrupt. But they are not very stable either. A firm that has those kinds of wild fluctuations in their capital is one to steer very clear of. My doubts about I Trade FX FAR EXCEED any I have about EFX that's for damn sure.

Last report from CFTC for I Trade FX LLC : $16,054,896!!!!
  • #887
  • Jun 24, 2008 2:54pm Jun 24, 2008 2:54pm
Ah yes, I did read those before. At the time, I couldn't respond to them on any forums (and boy, FS did put them EVERYWHERE on the internet, although I didn't realize until recently that they were also posted here under another name). I do want to thank him personally for panicking people without reason about net cap - I enjoy talking to long-time clients who all of the sudden read your posts and think we're going out of business. We were never close to bankruptcy, AFAIK, but it was a real hoot to hear an internet commentator tell us how we were, and then panic clients. Even more fun is when a competitor then pastes that forum link to your clients to try and pull them away from your company.

As I've said before, so few people on this site and others actually know what net cap is. While it is something to be knowledgeable about, the panic I've noticed over numbers is just amazing, as if that's all the assets a firm has. Younger, growing firms tend to put the money elsewhere to grow their business - it doesn't mean they can't meet their client obligations. If the NFA had doubts nowadays, they would hammer us, esp. with all the recent problems at other firms.

I know most of the story on the the neg three month, although I can't really go into it because it has to do with confidential information. We did actually talk to various bodies about it, but we don't "scream bloody murder" and we certainly don't answer individual internet posts about it.

Our net cap went down this month, which partially is because we tremendously upgraded our facilities and client connections in our new offices to handle our growth over the past two years - our old offices were way too small, and we wanted to have room to expand services for our clients. If people think that means "we're in trouble", that's their business, but we're aggressively trying to improve our offerings for the client. People who were at i-Trade FX long ago would be able to notice the difference now, and we are trying to continue to improve. At the end of the day, it is a business, but we also know we won't continue to grow like we are unless we're improving for our clients. We're not perfect, but when I get on the phone, I'm trying to make sure each person gets the best service I can give.
  • #888
  • Jun 24, 2008 3:02pm Jun 24, 2008 3:02pm
wow this is pretty scary. yeah, i would say get out of the small brokers, especially if they offer crazy deals or stuff that others dont. like the brokers that were shut down, it might be fraud. i would say go with the big brokers. cit and deustche bank are opening retail accounts. try them or something. its what i do. i use a meta trader demo avccount for charting and a deustche account for trading.
  • #889
  • Jun 24, 2008 3:19pm Jun 24, 2008 3:19pm
Quoting blacksun1
wow this is pretty scary. yeah, i would say get out of the small brokers, especially if they offer crazy deals or stuff that others dont. like the brokers that were shut down, it might be fraud. i would say go with the big brokers. cit and deustche bank are opening retail accounts. try them or something. its what i do. i use a meta trader demo avccount for charting and a deustche account for trading.
DB whitelabels FXCM, not sure if Citi is whitelabelling - I hadn't bothered to look at their platform yet.

Edit: I guess Citibank whitelabels Saxo.
  • #890
  • Jun 24, 2008 3:27pm Jun 24, 2008 3:27pm
Quoting AKforex
Post 20 by forexsavior: I Trade FX (-$3,039,000!!!!! Close to Bankruptcy!!!!)
Spare me your crocodile tears AK. My posts have saved numerous traders from losing their money at firms like One World Capital. Considering all the firms that went belly up last year traders have every right to be concerned about capitalization even if you poo poo it.

The number I reported about I Trade FX was no misprint. In fact, the old CFTC report from April of 2007 still shows it:
http://www.cftc.gov/files/tm/fcm/tmfcmdata0704.xls

When the Government of the United States is printing in its formal reports that a firm is undercapitalized it is perfectly legit to call that firm on it.
  • #891
  • Jun 24, 2008 3:36pm Jun 24, 2008 3:36pm
Quoting ck_itrade

As I've said before, so few people on this site and others actually know what net cap is. While it is something to be knowledgeable about, the panic I've noticed over numbers is just amazing, as if that's all the assets a firm has. Younger, growing firms tend to put the money elsewhere to grow their business - it doesn't mean they can't meet their client obligations. If the NFA had doubts nowadays, they would hammer us, esp. with all the recent problems at other firms.
"Panic?"

Of course, traders are foolish to be concerned about capitalization. This from a firm that actually bought out customers of a firm that went belly up due to not being capitalized!

If Capitalization is such a non-issue why did FXLQ lie for an entire year about its capitalization? If Capitalization is such a non-issue why did the NFA hike requirements to $5 million and then turn around and ask Congress to hike it up even higher?

The numbers don't lie, of the 20 some odd registered forex firms that went out of business last year not a single one had capital of over $10 million. In fact, in the history of the u.s. retail forex industry never has a forex firm with over $10 million ever gone out of business.

No amount of spin can change that.
  • #892
  • Jun 24, 2008 3:37pm Jun 24, 2008 3:37pm
Quoting forexsavior
Spare me your crocodile tears AK. My posts have saved numerous traders from losing their money at firms like One World Capital. Considering all the firms that went belly up last year traders have every right to be concerned about capitalization even if you poo poo it.

The number I reported about I Trade FX was no misprint. In fact, the old CFTC report from April of 2007 still shows it:
http://www.cftc.gov/files/tm/fcm/tmfcmdata0704.xls

When the Government of the United States is printing in its formal reports that a firm is undercapitalized it is perfectly legit to call that firm on it.
Mr Forexsavior, Check also your post 83
  • #893
  • Jun 24, 2008 3:40pm Jun 24, 2008 3:40pm
Quoting AKforex
Mr Forexsavior, Check also your post 83
Uh, so? looks good to me.
  • #894
  • Jun 24, 2008 3:45pm Jun 24, 2008 3:45pm
I don't have any reason to cry!! You ? YES, BECAUSE YOU HAVE A LOT OF COMPETITORS!!!!
  • #895
  • Jun 24, 2008 3:49pm Jun 24, 2008 3:49pm
Quoting forexsavior
"Panic?"

Of course, traders are foolish to be concerned about capitalization. This from a firm that actually bought out customers of a firm that went belly up due to not being capitalized!
Hello strawman! Where did I say they were "foolish" to be concerned about capitalization? I should have clarified that I was thanking you personally for our net cap, which didn't show what you said it did.

Quote
If Capitalization is such a non-issue why did FXLQ lie for an entire year about its capitalization?
Hello strawman #2! Where did I say it was a "non-issue"?

Quote
If Capitalization is such a non-issue why did the NFA hike requirements to $5 million and then turn around and ask Congress to hike it up even higher?
Weren't you just saying this was done too quickly in your opinion?

No one said it means nothing. The question is: do most people understand what it means? Do you know how it is calculated? If it is negative, what does that mean? Clearly you DIDN'T understand what a negative number meant, or you wouldn't have said "close to bankruptcy". The fact that you did say it shows that you didn't do that bit of research. That doesn't make everything you say invalid - I would never argue that - but it does show that on a topic that people are saying you're an authority on, you don't know even some of the basic concepts. That doesn't invalidate your whole argument, and I have never argued it did.

I have no problem with you informing people of numbers, so whatever problems you have with the other poster I was responding to, I don't have those same issues with you.
  • #896
  • Jun 24, 2008 4:02pm Jun 24, 2008 4:02pm
Quoting ck_itrade
Hello strawman! Where did I say they were "foolish" to be concerned about capitalization? I should have clarified that I was thanking you personally for our net cap, which didn't show what you said it did.

Hello strawman #2! Where did I say it was a "non-issue"?

Weren't you just saying this was done too quickly in your opinion?

No one said it means nothing. The question is: do most people understand what it means? Do you know how it is calculated? If it is negative, what does that mean? Clearly you DIDN'T understand what a negative number meant, or you wouldn't have said "close to bankruptcy". The fact that you did say it shows that you didn't do that bit of research. That doesn't make everything you say invalid - I would never argue that - but it does show that on a topic that people are saying you're an authority on, you don't know even some of the basic concepts. That doesn't invalidate your whole argument, and I have never argued it did.

I have no problem with you informing people of numbers, so whatever problems you have with the other poster I was responding too, I don't have those same issues with you.
Those strawmen were erected by you CK when you portrayed the trading public's concern about capitalization as a "panic." There has been no panic in this industry. If anything, the public has been far too lethargic about taking the problem of undercapitalization seriously. This thread is riddled with stories about undercapitalized bucketshops raking in the dough off the trading public.

I don't believe the Congress should have raised capital requirements to $20 million so soon but the problem of capitalization is such that they thought this was the only way to deal with it. that's how serious this problem is.

The reason we spend so much time obsessing over the CFTC's numbers is because these numbers are the only independent sources we have to check on a firm's financial health. When a trader sees a negative net capital balance that may not necessarily mean the firm has no money but it does indicate the firm is not meeting its capital requirement for whatever reason (and it appears in I Trade FX's case it had to do with digesting new positions from the acquisition of CFG?)

I don't write the rules for net capital reports. I just read the numbers and report.
  • #897
  • Jun 24, 2008 4:21pm Jun 24, 2008 4:21pm
Quoting forexsavior
when you portrayed the trading public's concern about capitalization as a "panic."
Actually, I was portraying the concerns of our clients reading what I believe was your post as the panic. When you tell people someone is going bankrupt, they might actually believe you. When you don't know that is the case, that's a problematic position. I don't know how many potential clients out there were scared off by that post that turned out not to be true. Most people I talked to didn't quote "-3 million", they said "I read something about you going bankrupt on the following website". Then our competitors linked to your post, claiming to clients that you were some sort of authority. The fact of the matter is, we weren't going bankrupt, you didn't fully understand what the numbers meant. Like I said, that doesn't make your intentions wrong, but you did cause some clients to panic with some wrong conclusions.

If you run over 2 people to save ten lives, that doesn't mean you didn't run over the first two people, even if you do save the latter ten. When you run over two people to save ten lives, and then you only save two, then save 400 lives at a later date, the question should still be asked: did you do a service in that specific situation? Your argument is that the ends justify the means - "I've saved X people in running over Y" - and in the end, that's a values judgment.

I'm not arguing your reports don't help, I'm just saying they aren't always fully factually accurate as to the situation. I'm sorry you choose to be insulted by that - I've rather enjoyed a lot of your posts. I'm not making general observations as to your goodwill, I'm just saying there is a LOT of misinformation out there about net cap, and I'm hamstrung by my license as to the ways I can respond whereas you are not.

Quote
I don't write the rules for net capital reports. I just read the numbers and report.
And draw conclusions (bankruptcy), some of which are right and wrong. And you have very little accountability on the ones that are wrong. I'm fine with that, but this was one of my few times to vent about one of the wrong times.

I'm sure I'm off to the wrong foot with you, FS, but I would love the chance to talk about that with you at some point in the future on the phone or something. Internet vents only go so far
  • #898
  • Jun 24, 2008 4:44pm Jun 24, 2008 4:44pm
Quoting ck_itrade
Actually, I was portraying the concerns of our clients reading what I believe was your post as the panic. When you tell people someone is going bankrupt, they might actually believe you. When you don't know that is the case, that's a problematic position. I don't know how many potential clients out there were scared off by that post that turned out not to be true. Most people I talked to didn't quote "-3 million", they said "I read something about you going bankrupt on the following website". Then our competitors linked to your post, claiming to clients that you were some sort of authority. The fact of the matter is, we weren't going bankrupt, you didn't fully understand what the numbers meant. Like I said, that doesn't make your intentions wrong, but you did cause some clients to panic with some wrong conclusions.

If you run over 2 people to save ten lives, that doesn't mean you didn't run over the first two people, even if you do save the latter ten. When you run over two people to save ten lives, and then you only save two, then save 400 lives at a later date, the question should still be asked: did you do a service in that specific situation? Your argument is that the ends justify the means - "I've saved X people in running over Y" - and in the end, that's a values judgment.

I'm not arguing your reports don't help, I'm just saying they aren't always fully factually accurate as to the situation. I'm sorry you choose to be insulted by that - I've rather enjoyed a lot of your posts. I'm not making general observations as to your goodwill, I'm just saying there is a LOT of misinformation out there about net cap, and I'm hamstrung by my license as to the ways I can respond whereas you are not.

And draw conclusions (bankruptcy), some of which are right and wrong. And you have very little accountability on the ones that are wrong. I'm fine with that, but this was one of my few times to vent about one of the wrong times.

I'm sure I'm off to the wrong foot with you, FS, but I would love the chance to talk about that with you at some point in the future on the phone or something. Internet vents only go so far
There was another poster who said "Going Bankrupt" on several boards but that was not me I can assure you. I sourced my information directly to the CFTC Report. A negative capital number indicates undercapitalization which can lead to a company going straight to court as we have seen with FXLQ, One World, etc... I didn't run anybody over. I didn't say you were bankrupt but when you are reporting such a number I think it perfectly fair to say you are close.

In any case when I Trade FX issued a press release stating they were going to meet the capital requirement and actually supported the increase I reported that as well.
  • #899
  • Jun 24, 2008 4:46pm Jun 24, 2008 4:46pm
Or so this website claims: www.easy-forex-warning.com

You’ll remember earlier this year the Savior wrote up a story on Easy Forex after an Israeli news broadcaster ran an expose on them:
http://www.forexfactory.com/showpost.php?p=1723203&postcount=525

In that story informants claimed that as introducing agents they only made money if their clients lost money. Well, in this soon to be published book from the gang at easy-forex-warning they claim this is how introducing agents are compensated:

Quote
In order to ensure it's wining against their clients, </SPAN>Easy Forex rewards their employees and people working for it outside the company, according to the amount deposited minus the withdrawals of their clients.
To demonstrate this method lets take an example.
1. An Easy-Forex agent convinces a person to open an account at Easy-Forex to trade the account by himself or to authorize an account manager to trade the account for him
2. The customer deposits $100,000
3. The agent is rewarded a certain percentage from this deposition. For the discussion let's assume 10%. That is, the agent is rewarded $10,000.
4. The customer trades the money in the account or someone else does it for him and after a while he withdraws the money. At this stage there are three possibilities:
a. The account is balanced. That is the account holds $100,000 that the customer withdraws. In this case the agent that brought this customer needs to pay Easy-Forex back the $10,000 he received for the deposted amount.
b. The account is drained. That is the customer lost all the money in the account. In this case the agent does not need to pay back Easy-Forex anything. In this case Easy Forex gets the reminder minus the money given to the agent.
c. The account gained relative to the opening time. Say, the account balance is now $200,000 and the customer withdraw all this money. In this case the agent needs to pay Easy-Forex the $10,000 they gave him and another $10,000 out of his own pocket.
What happens in practice is that they don’t charge the agent immediately. The agent's balance at Easy-Forex becomes now –$20,000, and next month he needs to recruit $200,000 before making any money. From any point of view this money comes from this agent pocket.
What Easy-Forex is telling their agent is that they are partners in the company: They tell them you will make money from the customers you bring only if the company will make money from the client, but you (the agent) will lose money from this customer if we, the company, will lose from him.
It’s called the “Net Deposit Method” and I must say this is all new to me. If it is true it is downright sinister. In fact, one agent provides testimony at the website in which he describes how angry an agent would get if their customer actually started making money: http://www.easy-forex-warning.com/_mgxroot/page_10755.html
Quote
“I saw people with clients that made money for many months. They use to give him such bad service. Answer unpleasantly… There was a way of life in the company, a way of life… when a client was making profit they use to shout, the son of a bitch, move away form here. The guy is making profit, he is destroying my account. He is destroying my salary. Fly from here, go to a different company. They gave him bad service to force him to move to a different company because it was on their expenses. This is a terrible thing. Now, at the end, it didn't matter what happened. I could not…. I, in the last Yom Kippur, and after talking to Rafi, I couldn't. This thing bothered me for a year or so. I don't know how I survived there one year or so.”
All of these testimonials apparently are related to Easy Forex’s Israeli operation. But is this kind of stuff going on in America too? Easy Forex is registered with the NFA and to date they do not have any infractions on file with U.S. regulators. But then again the more and more checking I do on these companies the more apparent it is becoming to me that the NFA has only skimmed the surface of retail forex (the fact that Robert Gray’s fake $50 million bond went unnoticed for months by regulators is still flabbergasting to me.)

In any case Easy Forex deserves particular scrutiny from the trading public over their alleged market making activities. Traders should seriously consider trading only with Dealers that are not in the market making business. The evidence against them is really starting to pile up.
  • #900
  • Jun 24, 2008 5:52pm Jun 24, 2008 5:52pm
Quoting forexsavior
Or so this website claims: www.easy-forex-warning.com

You’ll remember earlier this year the Savior wrote up a story on Easy Forex after an Israeli news broadcaster ran an expose on them:
http://www.forexfactory.com/showpost.php?p=1723203&postcount=525

In that story informants claimed that as introducing agents they only made money if their clients lost money. Well, in this soon to be published book from the gang at easy-forex-warning they claim this is how introducing agents are compensated:


It’s called the “Net Deposit Method” and I must say this is all new to me. If it is true it is downright sinister. In fact, one agent provides testimony at the website in which he describes how angry an agent would get if their customer actually started making money: http://www.easy-forex-warning.com/_mgxroot/page_10755.html

All of these testimonials apparently are related to Easy Forex’s Israeli operation. But is this kind of stuff going on in America too? Easy Forex is registered with the NFA and to date they do not have any infractions on file with U.S. regulators. But then again the more and more checking I do on these companies the more apparent it is becoming to me that the NFA has only skimmed the surface of retail forex (the fact that Robert Gray’s fake $50 million bond went unnoticed for months by regulators is still flabbergasting to me.)

In any case Easy Forex deserves particular scrutiny from the trading public over their alleged market making activities. Traders should seriously consider trading only with Dealers that are not in the market making business. The evidence against them is really starting to pile up.
So your saying dont trade with a bank? Do you have any idea how this market really works savior? Who the F*ck cares how companies make money as long as you get a fair price and fair execution? Stick to reporting my forex savior!

I dont agree that IB's should get paid out a portion of the losses but anyone who trades with easy forex or any of the other shady firms out there should do more DD before signing up.
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