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Just received this update from someone who has been involved in the controversy at Crown Forex. This would explain the withdrawal difficulties customers have been experiencing.


Quote
The skinny at Crown. Wanted to let everyone know what's really going on with Crown. First of all the people who were having problems withdrawing were carry traders who were not paying any interest with Crown. Crown realized some of these guys were holding GBP/JPY long term and not paying the normal fee for doing so. As a result they froze the accounts and tried to retroactively charge the clients a fee. The clients were not willing to pay it and complained to the Swiss authorites. I was able to negotitate the return of all my client's money so that he would not pay any fees. He was the biggest carry trader over there and one of the guys on FPA. Well they started to pay him but the investigation he helped get launched now will prevent him or anyone else from getting any money out of Crown at all intll the investigation finishes. So it's a lose lose for everyone involved.

Scott Kuehne
FX Traders Inc.


Developing...
In light of the government takeover of Crown Forex I am once again being asked, “which specific broker do you recommend?” That is not for the Savior to say. Different brokers have different products and all traders should conduct a regulatory background check and thoroughly demo test a broker’s platform before opening a live trading account.

That said there are many solid brokers in the market place who are regulated and unlikely to go under anytime soon. Here is the Savior’s list of approved brokers:

U.S. Based Brokers

  1. Oanda
  2. FXCM
  3. Gain Capital
  4. GFT Forex
  5. FX Solutions
  6. Interbank FX
  7. CMS Forex


European Based Brokers

  1. Saxo Bank
  2. IG Index
  3. CMC Markets
  4. MF Global
  5. City Index


Banks

  1. DBFX
  2. CitiFX


I have omitted smaller based U.S. brokers who have yet to meet the $20 million capital threshold, Swiss brokers who have yet to get a banking license and any offshore broker hiding out in shady jurisdictions such as Cyprus or Belize.

Of course, any of the brokers on the Savior’s list of “approved” brokers could run into trouble in the future. If Lehman Brothers and Bear Stearns can vanish overnight no financial institution is immune from insolvency. Already, I have reported on the financial troubles of both Saxo Bank and CMC markets in the last few months. But even taking into consideration the mass layoffs at both firms neither is likely to go belly up and take customer deposits with them.

In addition most of the U.S. based brokers on my list have had various regulatory actions taken against them (none of them however were charged with any financial violations and were related to marketing practices, which doesn’t interest me.)

I’m sure there are readers thinking to themselves, “that broker on your list is a crook and a cheat so how can you approve them?!” Simple, because those who feel one of these brokers has cheated them always has the option of filing a complaint with the appropriate regulator and have your day in court. But if you are trading with an unlicensed broker you’ll be lucky to even get a customer service agent on the phone to complain to in the first place let alone actually have an arbiter hear your case.

In short, I would feel comfortable opening an account with any of these brokers. Hence the reason they have been given “The Forex Savior Seal of Approval.”

Quoting bigjim1958
Hi folks:
Might be silly question but here goes. Why are there no ECN's on the capital requirement list. Are they not regulated the same way, and if they aren't how can we find out their financial condition. Thanks for your help.

Jim

Savior,
Care to answer this question? Regards.
Berlingske Tidende Business Nov. 29
http://www.business.dk/article/20081...ere/711280132/
Massive claim against Saxo Bank in dismissal case
By Peter Suppli Benson
Saxo Bank is facing several million-kroner suits in the wake of its dismissal of Charles-Henri Sabet of Switzerland who was head of Global Trading at the bank, and who is also a major shareholder in the bank. He was dismissed in August on allegations of irregularities. He has now retorted with several suits against his own bank and is to try to have the Saxo purchase of his old bank rescinded.
Several suits are now following in the wake of Saxo Bank’s dramatic dismissal of Charles-Henri Sabet on August 29 this year.
Charles-Henri Sabet, who is one of the major shareholders in Saxo Bank, was dismissed from his post as Chairman of Saxo Bank in Switzerland and head of Global Trading at the bank.
Sabet has started the first suit in Switzerland – a suit containing several employment law demands. But to Berlingske Business, the dismissed Swiss bank director now says that within a few weeks he will be ready with a further two suits against Saxo Bank.
“We are close to being ready with a major suit on ‘damages of interests’ and at the same time we will open a suit to attempt to rescind Saxo Bank’s purchase of my old bank Synthesis,” says Charles-Henri Sabet, who has declined to put a sum on his demands.
Saxo Bank has only a few comments on the upcoming suit.
“This autumn we reduced our staff with 267 employees including several senior employees. This case has nothing to do with not being able to handle firing managers, but I cannot get further into the core issue here as we do not make statements about personnel issues,” says Kim Fournais, one of the two founders of Saxo Bank adding:
“Both parties are under a duty of confidentiality and we will be keeping to that. But we calmly await the suit. The truth will come out then,” says Kim Fournais.
The basis for the dismissal is very complex. According to Saxo Bank, Charles-Henri Sabet had committed ‘irregularities’, but the bank has not waited to explain what those irregularities were. In connection with the dismissal, several media said that the issue was one of large-scale insider trading. It has not been possible, however, to verify the suggestions.
Charles-Henri Sabet has, however, decisively refuted any claims that he has infringed on the Swiss banking rules and on Sunday in a major interview with Berlingske Tidende, he repudiates the allegations.
In connection with the interview in Geneva, Berlingske Business has been able to read the correspondence between Charles-Henri Sabet and the Swiss financial authority since his dismissal on August 29, 2008.
The letters show that the Swiss financial authorities have apparently never opened a case against Sabet. That is rather dramatic as Saxo Bank has precisely based its dismissal on the fact that an investigation was under way against the bank director.
“I have no idea what I am supposed to have done to justify dismissal. The allegations that I am supposed to have contravened Swiss stock exchange rules are pulled out of thin air. I was previously part of a technical investigation in which I had personally carried out some trades. That is something that I should not have done – but it should not result in dismissal. I can only see this as the result of a sort of power struggle. Perhaps Kim Fournais and Lars Seier Christensen were angry because I spoke my mind about Ryllberg. Perhaps they wanted to get rid of me – and tried to do so without paying compensation. I don’t know,” says Charles-Henri Sabet.
“We are in contact with Saxo Bank and we are aware that there is a conflict between Charles-Henri Sabet and Saxo Bank. But apart from that e have no comment,” says Tobias Lux, Deputy Head of Communication at the Swiss Bank Authority.
Charles-Henri Sabet’s dismissal caused quite some disbelief in baking circles in Denmark and Switzerland where he was known as the founder of Synthesis Bank which was taken over by Saxo Bank in 2007.
One of Saxo Bank’s problems is that Charles-Henri Sabet is the third largest single shareholder in the company. Only the company’s two founders, Kim Fournais and Lars Seier Christensen personally own more stock in the company. Charles-Henri Sabet owns almost six percent of stock. According to Business’ information, Saxo stock is traded – although not publicly – at around DKK 160. This means that Charles-Henri Sabet owns some DKK 500 million in Saxo Bank.
Berlingske Tidende has presented several further questions to Saxo Bank which management has not wanted to answer.


The day Saxo trembled

By Peter Suppli Benson
He was dismissed from Saxo Bank on the basis of harsh accusations of insider trade and “serious irregularities”. The dismissed Saxo executive, Charles-Henri Sabet, has claimed innocence all the way.
GENEVA: He arrives at the interview with a roar. An entrance the size of the noise he made when he left Saxo Bank earlier this year.
Not that you can directly compare the firing of Saxo Bank executive and multi-millionaire Charles-Henri Sabet with the roar of the black Porsche RS Turbo which he nonchalantly leaves with the engine howling at the entrance to the posh Hotel La Perle at Lake Geneva. But it is clear that Charles-Henri Sabet is not just a person who slides in an out of a door without anybody noticing – or in or out of a company such as Saxo Bank, for that matter.
He has dark hair and is stocky. It is evident that the Egyptian forefathers shine through. It is also evident that he is a man who is extremely comfortable in the deep armchairs in the lounge of Hotel La Reserve. He nods to the uniformed employees, finds the best corner to speak in and then spends the time telling his story while he sometimes glances into the hotel lounge and sometimes checks his indispensable Blackberry that continually emits noises with calls and new emails. Perhaps we are just prejudiced, but it is presumably here – rather than in the fine offices in the countless banks in the city that the most important bank transactions take place in Geneva and surroundings.
It is the first time that Charles-Henri Sabet steps forward to give a regular interview about his dismissal. About the insider accusations that apparently never gave rise to an official issue, about his relationship with the management of a bank in which he is still the third largest individual shareholder and about the court cases that are waiting.
At present, it is outside the bank offices that Charles-Henri Sabet has to cultivate his business connections. A 23-year career as a banker and trader was put on standby when, on August 29, he was fired downright from his post at Saxo Bank.
The decisive letter
At that time Charles-Henri Sabet was board chairman of Saxo Bank /Switzerland SA and Global Head of Trading at Saxo Bank A/S. Firings happen every day – but ever since the way that Charles-Henri Sabet was dismissed from Saxo has made various internet forums specialising in the world of finance overflow with burning stories about the firing.
Why does a bank sack one of the most important executives who - with nearly 6% of the shares in Saxo Bank - is also the third largest individual shareholder exceeded only by the two founders, Lars Seier Christensen and Kim Fournais?
The answer is blowing somewhere in between Kim Fournais and Lars Seier Christensen on the one side and Charles-Henri Sabet on the other. The fact is that Charles-Henri Sabet was suspended from the bank on August 29. The dismissal came as a letter and an email written and signed by Saxo Bank’s lawyer, John Korsø Jensen.
In the letter John Korsø Jensen wrote that Saxo Bank had discovered that Charles-Henri Sabet had broken the Swiss stock exchange rules and that he had provided wrong information to the authorities regarding the alleged breaches of the rules. In clear speech, but without Saxo Bank saying it, Charles-Henri Sabet was accused of having committed insider trading – an accusation that has never been conclusively confirmed or disproved.
According to the letter from Saxo Bank, the Swiss authorities were also in the process of investigating Charles-Henri Sabet’s possible violations of the Swiss stock exchange laws. But as described in Berlingske Business yesterday the problem for Saxo Bank is that the Swiss financial authorities have never been in the process of investigating Charles-Henri Sabet.
This is clear after Berlingske Business in Geneva had the opportunity to read through the correspondence between Charles-Henri Sabet and the Swiss financial authorities. In a letter dated November 3, the authorities state that they have never had an investigation and accordingly have no need for assistance from Charles-Henri Sabet and his lawyers for a possible investigation.
I will fight
The Swiss banker immediately put himself at the disposal of the authorities as soon as the dismissal was reality. But today, three months later, nothing has happened.
It is not exactly that the fired banker is a defeated man. He describes himself as one of the 300 wealthiest people in Switzerland, he has new project going that will – as he puts it - be launched before anybody dares believe it, and then he has a fighting spirit that radiates from the dark and stocky man. The Porsche is just a sign that the bank account is still in the black. His personal addresses count houses in Geneva and Nice and, naturally, a yacht. In this case a large one, 40 meters and permanently moored in posh Antibes!
But most importantly, he is ready to fight Saxo. At all costs.
“When my parents died they left me some money. But most importantly they had taught me always to treat people in a decent way. I have been thrown out of the bank I created in an indescribable way. The management of Saxo thinks they can do with people what they like – and even get away with it. I cannot accept that. And whereas others might be afraid of Kim Fournais and Lars Seier Christensen and perhaps are also financially dependent on them, I have money and the will to fight against them. For this reason there are already two court cases going in the wake of my dismissal and the big one – the one about compensation for loss of reputation – will be launched before the end of the year,” says Charles Henri Sabet.
The dismissal on August 29 was the culmination of five years of staggering relations between the two Saxo founders and their Swiss executive – relations that exploded with a bang.
“I basically don’t understand what happened. I have had good and close relations with Kim Fournais and Lars Seier Christensen and found that Kim had become one of my really good friends. Those two guys were at my private table when I got married. They weren’t sitting somewhere in the hall but together with me and my wife at our table. That really says most of it,” explains Charles-Henri Sabet.
The Danish connection
In 1991 Charles-Henri Sabet founded the bank that developed into Synthesis Bank. For the first many years it was a typical “private bank” that worked with and for rich private customers. Later on Charles-Henri Sabet wanted to spread the bank’s activities and in this connection came into contact with Kim Fournais and Saxo Bank.
“We were introduced and I liked what I heard. I thought the bank had a good business model and its systems for trading were extremely interesting. This lead to a collaboration that soon became good and profitable for both parties. Over the next years we further developed our connections, and I think we ended by being among the most important cooperation partners for Saxo Bank,” says Charles-Henri Sabet.
In step with the increasingly close partnership between the Danish and the Swiss bank, it was clear that Saxo made a comfortable two-digit million kroner profit annually on the cooperation. This was the money Synthesis had to pay Saxo for its use of the special bank systems which have made Saxo Bank stand out.
At some point, however, Charles-Henri Sabet began to study whether they could develop new systems on their own to replace those of Saxo, and this sped up the Danish-Swiss connection.
“I thought perhaps that we paid a bit too much to Saxo for using their systems. We started some development work and seriously started thinking about dropping Saxo’s systems and using our own. I think Saxo found out and I am sure that is why they wanted so much to buy my bank,” says Charles-Henri Sabet.
But even though Saxo was the party that wanted to buy, the negotiations still ended as a farce. Today Charles-Henri Sabet is sorry that he did not decode the danger signals already back then.
“Perhaps I should have had my suspicions already during the negotiations for Saxo’s acquisition of Synthesis. The negotiations were initiated in 2006, and after many talks we agreed on a price and terms. But after we had settled all details, Kim Fournais wanted to renegotiate everything. He wanted the bank at a lower price and wouldn’t do what we had agreed. Later on it turned out that this is the way he operates. In hindsight it reminds me of the way they do business in the souks in Morocco,” says Charles-Henri Sabet who refused to sell. One year later, however, the sale went through. Charles-Henri Sabet received cash and a shareholding of nearly 6% in Saxo as payment.
Disagreement about bosses
With the purchase Charles-Henri Sabet said goodbye to his bank, but hello to a post as top executive for all trading in Saxo Bank. The plan was that the Swiss banker was to retain his residence in Switzerland but travel to Denmark whenever necessary.
But even though Charles-Henri Sabet did not frequent Saxo Bank on a daily basis he soon found out that something was wrong.
“I had come to a bank where I observed that people were not pulling in the same direction. I could see a lot of bosses who exclusively acted according to what was best for themselves and their careers. It was at a time when the bank grew explosively, and this was why the individual bosses were allowed to employ many new people. Perhaps it made them more important as bosses, but the fact that there was no cooperation at all was not healthy for the bank,” says Charles-Henri Sabet.
Charles-Henri Sabet immediately passed on his observations to Kim Fournais and Lars Seier Christensen. But nothing happened.
“Kim Fournais and Lars Seier Christensen were part of the game. They have their own people and only work modestly together. Therefore this was the way that things were done in the bank even though the pair knew that it was not healthy for the bank. I know that the pair tried to get hold of Eric Ryllberg and Karsten Poulsen to stabilise things already in 2006; but at that time they were overbid,” says Charles-Henri Sabet.
The relations between particularly Kim Fournais and Charles-Henri Sabet developed into a friendship that continued after the takeover of Synthesis. As number three in the bank Charles-Henri Sabet was a significant part of the work to ensure Saxo’s continued progress. He was responsible for the large trading area and he set the team of employees. That Kim Fournais and Lars Seier Christensen were satisfied is evident from the quarterly statement that all employees in Saxo receive. This statement evaluates their performance and the areas they are to work with. The enthusiasm for Charles-Henri Sabet’s work was unambiguous. The only slight complaint was that Kim Fournais and Lars Seier Christensen would like the see Sabet in Denmark slightly more often.
Wrong model
The relationship between Kim Fournais and Charles-Henri Sabet was by now so cordial that the families Fournais and Sabet visited each other, and Kim Fournais stayed several times in Sabet’s luxurious residence in Nice. The 40 meter yacht was also lent to Kim Fournais and his family.
But it wasn’t just another puppet Saxo acquired when they took over Synthesis. In the course of 2007 and the first half of 2008 disagreement began to surface between the two Danish Saxo owners and Charles-Henri Sabet.
“Kim Fournais told me that Lars and he were trying to get hold of Erik Ryllberg and Karsten Poulsen. I said we didn’t need two more top executives – and particularly not a couple of people who may be competent leaders but who are not bankers. Saxo needs competent bankers to make sure the bank is sharp and competitive. My recommendation was that Kim Fournais and Lars Seier Christensen should maintain the rein instead of employing even more people in management,” says Charles-Henri Sabet.
Despite the recommendation by Charles-Henri Sabet, Ryllberg and Poulsen were employed. After their start in August, management met in the middle of August. For Charles-Henri Sabet it was immediately clear that the new management structure would cause problems.
“Ryllberg made it clear he wanted to reduce the bank. That he would concentrate efforts in Denmark, and that they would move people and decision-making powers from abroad, including Switzerland. He wanted to bring in foreign experts to the bank in Denmark and employ them according to the Green Card scheme. But that model is no good. Perhaps you can bring in people who work in the bank for precisely three years. But after three years and one day they are gone. They don’t want to pay the high Danish taxes. For that reason alone the model is no good,” says Charles-Henri Sabet.
A few days later Charles-Henri Sabet went to see Kim Fournais and Lars Seier Christensen. He said that he would not be assigned to Eric Ryllberg, and that it was a solid part of the agreement that Sabet only referred to Fournais and Seier.
“I made it clear that if things were to be run in this way, then I wanted to leave the bank. I offered to do this in a good and quiet way where I stayed on for a couple of months and then sold my stock in the bank as per agreement. I gave this message to the two and then went away on vacation for the rest of the month. I heard nothing until August 29 when I was suddenly dismissed,” says Charles-Henri Sabet.
Dramatic dismissal
The dismissal was a drama. According to Berlingske Business’ information, Saxo Bank flew a whole team of IT and legal experts to Switzerland. Several people received a phone call at 3 o’clock at night and were told to immediately meet at the airport where a private jet plane was waiting. In Switzerland the job was to clear up in the bank’s IT system and prevent Charles-Henri Sabet from getting access to the systems.
“I discovered that I had been dismissed when I opened an email during my vacation. I immediately tried to ring Kim Fournais, but his telephone was closed. Later I succeeded in catching Lars Seier Christensen, but that didn’t give me much information. The message was simply that I should stay away from the bank,” says Charles-Henri Sabet.
With the team of IT and legal experts Kim Fournais had flown to Switzerland. On Friday August 29 he turned up in the bank and summoned the employees to a meeting. They were told about the accusation against Charles-Henri Sabet and about his dismissal. They were also warned against contacting him.
“I simply don’t understand what has happened. What I am supposed to have done that justified a dismissal I simply have no idea. The accusations that I should have broken the Swiss stock exchange rules are completely absurd. At an earlier stage I was part of a technical investigation regarding my implementation of some transactions. I shouldn’t have done that, but it could never have justified a dismissal. I cannot see this as other than the result of a kind of power struggle. Perhaps Kim Fournais and Lars Seier Christensen were angry that I gave them my views on Ryllberg. Perhaps they wanted to get rid of me – and tried to get away with it without paying compensation. I don’t know,” says Charles-Henri Sabet.
Don’t they bully me
Since then there has been no contact between Charles-Henri Sabet and Saxo Bank. The Swiss banker has tried to procure more details about the dismissal and proof that could justify the dismissal. But in vain! Charles-Henri Sabet’s lawyer has repeatedly been in contact with the Swiss authorities. The message from them is that there has never been an issue.
It now seems unavoidable that the dismissal will develop into a regular legal dogfight. The first lawsuits have already been submitted.
“My lawyers and I have already submitted the first couple of complaints and another one is on its way. A couple of weeks ago Lars Seier Christensen called me and proposed a meeting in Denmark. I said no to going to Denmark. I don’t mind meeting them, but it must be on neutral ground – I don’t care whether it is Rome, London or New York, but not in Denmark. Since then I have heard nothing,” says Charles-Henri Sabet.
And back to the roaring Porsche in front of Hotel La Reserve in Geneva. Like the Porsche is far from the world’s most discreet car models, there is nothing to suggest a quiet discreet solution to the firing of Charles-Henri Sabet.
“I am ready to go the whole way. They won’t be allowed to bully me. Maybe they can succeed in bullying others, but not me,” says Charles-Henri Sabet.
Berlingske Business has presented a list of questions to the management of Saxo Bank. The bank’s management has not wanted to answer questions about Charles-Henri Sabet and the situation prior to the dismissal. In addition to the interview with Charles-Henri Sabet, the article is based on a range of interviews with people with an insight in Saxo Bank.




Quoting forexsavior
Last month the S.S. Saxo Bank forced hundreds of employees to walk the plank in a furious effort to keep their Danish Longship from taking on any more water amidst the financial tsunami that has engulfed CFD brokers around the world. But it is another former shipmate of Saxo that has now taken to his Somalia-like pirate ship to fire pot shots at this listing to port Viking Broker. Ahoy it’s Charles-Henri Sabet! With parrot perched on shoulder and a black eye patch in place Sabet has Saxo in his sights…...
Quoting forexplayer
Savior,
Care to answer this question? Regards.
ECN are acting as IT company and you need a prime broker to trade with ECN.so they do not need to have capital
What do you think about the companies who run the Managed account with a return of 10 to 20 procent return per month?
Are they reliable .? If yes ,do you know any of them?
[


call madoff

quote=alex12;2444068]What do you think about the companies who run the Managed account with a return of 10 to 20 procent return per month?
Are they reliable .? If yes ,do you know any of them?[/quote]
Quoting josephjones
[


call madoff

quote=alex12;2444068]What do you think about the companies who run the Managed account with a return of 10 to 20 procent return per month?
Are they reliable .? If yes ,do you know any of them?
[/quote]
LOL. Good point ,but are they all unreliable? Are they or shouldn't they be regulated?
your money will desappear in less than 1 month

LOL. Good point ,but are they all unreliable? Are they or shouldn't they be regulated?[/quote]
Quoting josephjones
your money will desappear in less than 1 mont
LOL. Good point ,but are they all unreliable? Are they or shouldn't they be regulated?
[/quote]
Thanks for the information
ACM is officially closing their U.S. office and retreating back to Switzerland after failing to make any headway in the U.S. Of course the Savior has long suspected this Swiss broker wouldn’t last very long on this side of the pond in light of the increased capital requirements. Furthermore, I was right on the money in stating they clearly didn’t due their homework before opening an office here. The company was a registered NFA member for less than 12 months. What a wretched waste of money, time and man hours to set up an overseas office and then close it down in less than a year's time. This is not the sign of a company with a master plan. If they were publically traded I’d be shorting them with the intensity of a day trader dealing in shares of General Motors. Here is the official statement from ACM which you can find on the front page of their website: http://www.acmusa.com/

Quote
ACM USA's white-label licensor, ACM – Advanced Currency Markets SA (“AC-Markets”), announces another milestone in its already impressive and successful history: the formation and creation of ACM Bank. The ACM Group proudly announces the planned reorganization of the ACM Family under the new ACM Bank.
In an effort to ensure greater security, safety, and enhanced banking and investment services to their clients, ACM Group is in the process of applying for its Swiss banking license.

As a result, for the short term ACM USA will no longer be an active NFA member. This means that ACM USA will no longer act as a counterparty to forex positions and will not continue to service client accounts. Instead, ACM USA will remain a licensed office to AC-Markets assisting in the opening of forex trading accounts directly with AC-Markets and in the future with ACM Bank. AC-Markets is not a National Futures Association (“NFA”) member firm and cannot accept U.S. customers until the approval of its Banking license.

Please note the coming date which is of importance to your ACM USA forex trading account.

  1. On January 8, 2009 at 9:00 a.m. EST, all open forex positions and accounts will be closed at the prevailing market price.

You may continue to trade or close your ACM USA account until the above mentioned date. However, should you not take any action before the above mentioned date, your account will be closed and the account balance will be returned to you by check.



I love how these brokers close up shop and give their customers barely any notice before their positions are forcibly liquidated. One day you are trading with a long term strategy waiting for a position to retrace and the next your broker sticks a fork in your positions and blows up your account. And ACM celebrates this as a “Milestone,” (to be ranked right up there with the invasion of Normandy and the first man landing on the moon perhaps.) This is why it is so important for traders to make sure their broker is around for the long haul. And as the record shows, Swiss brokers are anything but safe long term bets.


We’ll be waiting to see if you get that bank license guys but as of now ACM is an unregulated Swiss broker and should be avoided until they once again submit themselves to real regulation.
One of the very first forex dealers that the Savior shined his light on was One World Capital. Here is an excerpt from the summer of 2007: http://www.fxstreet.com/forum/showpost.php?p=5102&postcount=6

Quote
As I continue to update the dead forex firms walking list I'm amazed how many people think fraud and undercapitalization are completely separate issues. Often times they are not. The reason is quite simple: firms that are committing fraud are not known for having legible books. And Vice versa. Firms that have a hard time maintaining their capital requirements will often cut corners and commit fraud to keep their firms from going under. Finally, smaller firms simply don't have the money to maintain the kind of large legal and compliance staffs necessary to keep up with the battery of regulations being issued by the NFA and CFTC. And of course some firms are just plain incompetent. All these factors have come to a head with Forex Dealer Dead Pool Member One World Capital, who is now in serious trouble with regulators.

To see the full report on One World's misdeeds you can click on the NFA's report yourself: http://www.nfa.futures.org/BasicNet/...px?seqnum=1190

In short, One World is a classic Dead Forex Firm walking. Firms like One World are the reason the NFA is going to raise capital requirements. And when they do, does anyone honestly believe the One World's of the world will survive?

Over the next several months One World rapidly circled the Bowl:
http://www.fxstreet.com/forum/showpost.php?p=5976&postcount=39

Quote
The word on the street is that the situation at One World has become so dire that a large chunk of their sales force resigned because they hadn’t been paid for two months. Other traders are reporting non-responsive customer service, emails that go unanswered and phones that keep on ringing. All the signs of a firm in its last death throes…

The bottom line is when you can’t return a customer’s money when they ask for it you are finished in this business. One World may be able to limp on indefinitely but it is hard to see this firm making a comeback to respectability. Barring a fat sugar daddy willing to pump in ten million dollars this firm’s days appear to be numbered.

http://www.fxstreet.com/forum/showpost.php?p=7943&postcount=85

Quote
And the hits just keep on coming for One World Capital. The NFA just announced that One World has been fined $100,000 for the complaint brought against them last spring.
http://www.nfa.futures.org/basicnet/...17&contrib=NFA

In any case, I strongly recommend ANYONE who has an account with One World for the love of criminy get your money out of that firm once and for all- if you even still can…

Finally, like that fat man in the Monty Python sketch who exploded upon eating a mint One World’s bloated and rotting gut burst into a million pieces in December of 2007 when regulators shut the firm down for good:
http://www.fxstreet.com/forum/showpost.php?p=8337&postcount=92

Now the Feds have swooped in and arrested John Walsh and friends. Leading the charge is Patrick Fitzgerald. Fitz can mount Walsh’s head above the fireplace, right next to former kills like Scooter Libby and Governor Blago. Welcome to the party pal: http://www.chicagotribune.com/business/chi-winnetka-forex-fraud-arrest-jan07,0,405109.story

Quote
Feds arrest 2 Winnetka futures dealers on fraud charges

By James P. Miller
Tribune reporter
4:27 PM CST, January 7, 2009
Federal agents arrested two top executives of a Winnetka foreign-exchange futures dealer that collapsed over a year ago on federal fraud charges, the Justice Department disclosed Wednesday.

Both men were principals with One World Capital Group, which was effectively shut down in December of 2007 when the Commodity Futures Trading Commission – responding to a growing chorus of complaints from customers who said they'd been unable to withdraw funds from their accounts -- obtained a court order that froze One World's assets and barred the troubled foreign-currency trader from further trading activity.

Wednesday's actions, including agents' execution of "search and seizure" warrants at both officials' homes, represent the first criminal charges to emerge from the company's failure.

FBI agents arrested One World founder John E. Walsh at his Lake Forest home this morning, U.S. Attorney Patrick Fitzgerald's office said in a Wednesday statement.

Another One World principal, 43-year-old Charles G. Martin, of Glencoe, was arrested last night in the Los Angeles area. The government calls Martin a "de facto" official of the currency-trading concern, although he was prohibited from holding a position with the company.

A criminal complaint unsealed this morning charges both men with one count of wire fraud each, for improperly diverting to their own use customer funds that were supposed to be invested in foreign-currency trades.

The two men used customer funds they had misappropriated "to finance a lavish and extravagant lifestyle," racking up huge sums on corporate credit cards largely paid for by the company, the government's criminal complaint says.

Martin charged over $1 million "at a strip club and restaurants" over the course of 20 months, the government says, spent $50,000 at toy stores, and used his company credit card to finance $280,000 in jewelry-store purchases.

In addition, the complaint says that Martin and Walsh used hundreds of thousands of dollars they had diverted from One World to finance a never-released movie entitled "Order of Redemption."

The company, founded in 2006, hit turbulence in the spring of 2007, the government notes, when the National Futures Association found improprieties in the course of an audit.

The fallout from that audit sparked a rise in the number of customers who sought the return of money they had invested, the complaint notes, but the firm couldn't honor those requests because the two men had allegedly been dipping into margin funds as part of their misappropriation scheme.

Based on the company's refusal to honor those customer redemption requests, the federal regulatory agency known as the Commodity Futures Trading Commission filed a civil complaint against One World and Walsh in Chicago federal court in mid-December, 2007. That litigation led to the asset freeze that has been in place for the past year.

Chicago attorney Kevin Flynn, who is representing Walsh in the One World matter, said he hasn't had a chance to review the government's criminal complaint, but said "I don't believe that Mr. Walsh will admit guilt of any criminal conduct."

Indeed, said Flynn, Walsh has been cooperating with the CFTC's One World probe, and had this week reached an agreement in principle, in the courtroom of the judge hearing the civil case, on a possible resolution of the CFTC's complaint.

"We were shocked and surprised at the timing" of the government's decision to bring criminal charges, said Flynn, "coming as it does on the heels" of the tentative resolution of the civil complaint.

Martin, who was to appear Wednesday in Los Angeles federal court, couldn't immediately be reached for comment.
Quoting forexsavior
Fitz can mount Walsh’s head above the fireplace, right next to former kills like Scooter Libby and Governor Blago.
I have just two words...Bernie Madoff.
The NFA’s next scheduled capital requirement is set to kick in on January 17th at $15 million. Firms offering leverage of over 100 to 1 therefore must have over $20 million set aside. Alpari was showing $18 million in their last net capital filing but still appear to be about $5 million short of the amount required to offer leverage greater than 100 to 1. Therefore, Alpari has just announced they are raising their margin requirement:
http://www.alpari-us.com/en/company-news/234.html

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Company News – January 8, 2009: Change to Customer Agreement and Terms of Business
Effective January 18, 2009, Section 2 of the Customer Agreement and Section 6 of the Terms of Business are being amended as follows:

CUSTOMER AGREEMENT – SECTION 2. SECONDARY RISK DISCLOSURE: HIGH RISK INVESTMENT

In accordance with these changes, effective January 18, 2009, Alpari (US) will increase its stop out level to 100% of the required margin.

Please refer to the following example for an explanation on how this will affect your trading:
Assume that the quote for the EUR/USD is 1.2600, and you have $5,000.00 in your account.
Assume that, today, you open a position of 1 standard lot of EUR/USD. If the price moves against you after you open your position, MetaTrader 4 will automatically close your position around $252.00 (20% of the required margin), with a loss of around $4,748.00.

As of January 18, 2009, you open a position of 1 standard lot of EUR/USD in your account. If the price moves against you after opening your position, MetaTrader 4 will automatically close your position at $1,260.00 (100% of the required margin), with a loss of $3,740.00.


Please note the following: all positions that are left open with insufficient margin after the market closes on January 16, 2009 will be automatically closed upon the market’s re-opening on January 18, 2009, without further notice.
Team of Alpari (US)


With the new cap requirement scheduled to kick in shortly expect more such announcements. Traders who employ high leverage may want to consider winding down their positions if they are trading with smaller brokers to avoid any nasty margin calls.

*Update, might be too late for some traders regarding nasty margin calls:
http://www.forexfactory.com/showthread.php?t=144999
The CFTC has just released their latest net capital figures. With the $15 million dollar deadline just days away who will make the cut and who will not?
http://www.cftc.gov/marketreports/fi...fcms/index.htm

The following firms have net capital below $15 million

Advanced Markets $10,195,000
Hotspot $10,527,000
Easy Forex $10,606,000
GFS Forex $12,861,000
MB Trading $14,664,000

AMIFX, HotSpot and Easy Forex are really behind the 8 ball. They are not even close to the $15 million mark. Sure the CFTC cap report lags about six weeks behind but time is running out and these firms have not shown any kind of gradual increase in their cap numbers unlike their other competitors.

The following firms have net capital below $20 million

IKon Royal $15,013,000
Forex Club $15,823,000
I Trade FX $17,098,000
Alpari $18,158,000
ODL $18,982,000

The following firms have net capital above $20 million


CMS Forex $26,540,000
PFG $27,704,000
Interbank FX $42,954,000
FX Solutions $45,125,000
GFT Forex $73,808,000
Gain Capital $102,959,000
FXCM $131,416,000
Oanda $170,799,000

As always conduct your due diligence and make sure the firm you are trading with will be able to comply with the new $20 million capital requirement going into effect in the months ahead.
thanks forexsavior for putting together the summary, it really helps a lot. Out of curiosity, how did you match the forex brokers names with the company names in the list from CFTC? Did you have to go through their website and find out under what name they are registered?
Quoting challenger78
thanks forexsavior for putting together the summary, it really helps a lot. Out of curiosity, how did you match the forex brokers names with the company names in the list from CFTC? Did you have to go through their website and find out under what name they are registered?

http://www.cftc.gov/marketreports/fi...fcms/index.htm
ODL Securities has developed a nervous reaction to the battery of new regulations in the United States and has officially thrown in the towel. They are closing their U.S. office and shipping all their customers to FXCM. ODL released a fascinating press release making the announcement: http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=10f6f438-1c7a-4584-b8ec-cb706e07fb77

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ODL Securities Sells US Business

ODL Securities, the leading independent FOREX, derivatives, equity, spread betting and commodity trading house has sold the US division of its profit making US Forex business to Forex Capital Markets LLC (FXCM).

The move follows the current and planned implementation of new and more complex regulatory rules that have made it increasingly burdensome for all Forex Dealer Members to operate in the United States. These include increases in the minimum amount of regulatory capital that a Forex Dealer Member must maintain - up by three times over the past year and due to increase further in May to $30mn.

A strategic decision was therefore taken by ODL to use its financial capital more efficiently to fuel its growth in other parts of the world.

As part of its expansion strategy ODL Securities will open new JV offices in Turkey and Australia in the very near future, and expand its operations in Japan and Canada. In the UK head office, the business has been restructured to improve its offering with a focus on multi-lingual customer service and support (ODL now has clients from over 100 countries).

Announcing the sale, Graham Wellesley, Chief Executive of ODL Securities, said: “This has been a hard decision for us to make, ODL Securities Inc. is a very successful and profitable operation, but we could not justify disproportionately supporting one of our smaller subsidiaries.

“We remain firmly committed to expanding our international reach and to that end we have dramatically strengthened the management and resources of our UK Sales and Servicing Teams as well as developing new ventures in Europe, Asia and Australia. We remain profitable and our strategy will continue to focus on growing the business in 2009.”


Higher capital requirements are clearly squeezing smaller forex brokers and there are sure to be more brokers leaving the industry in the months to come. Traders need to be very wary of opening up long term positions with brokers who have less than $20 million in capital. As we have seen these smaller forex brokers close up shop (or raise margin requirements) with barely any warning to their customers. Traders deserve better peace of mind than that. It is hard enough just trading in these crazy markets let alone having to worry if your broker is about to close their doors and give your account the boot. Money talks in this business. If your broker can’t crow about having lots of capital on hand, beware…
Please be aware, that even though i have heard good things about FXCM, and they have the capital, that if you go with a micro account, or use their MT4 platform, you have absolutely no support on these. No where to call to get out of a trade, no where to call when things go wrog. Just thought i would through that out there, in case some people don't know that.
Francesc at FX Street is reporting that the SFBC investigation of Crown Forex continues and that customers still can’t withdraw their funds. However, it appears the blockade may be lifted in a few weeks time.

http://blogs.fxstreet.com/francesc/2009/01/19/update-crown-forex-investigation-still-weeks-to-go/

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As I know many of you are highly concerned for the sake of your money at Crown Forex as the firm is currently under SFBC (Swiss Federal Banking Commission) investigation, I’m trying to be in close contact with management at Crown Forex and SFBC in order to keep you as best updated as possible.

Today, I got a phone call from SFBC. My counterpart was not able to confirm me when the investigation will end but from our conversation I got the feeling that we are not far from it.

I had been previously told that we could see the end during this week but it seems that the investigation will still last for some more weeks.

What I do get a confirmation is that it is totally true that SFBC does not allow traders to withdraw their money till the investigation will finish. To get this confirmation from SFBC is definitely a relief for me and I hope it is for many of you.


This is what can happen to you if you trade with an unregulated broker. Beware Swiss brokers that do not have a banking license.
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