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CFG shut down by NFA

  • #21
  • Apr 2, 2007 2:35pm Apr 2, 2007 2:35pm
Quoting Linuxser
The Commission also notes that recently an unrelated firm, Forex Capital Markets LLC (FXCM), has issued a press release which contains inaccurate information relating to the proceedings in this matter. Specifically, FXCM inaccurately asserts that the CFTC’s approval is required for any transfer of customer accounts to another forex dealer. Contrary to FXCM’s claims, the court appointed a receiver who will independently assess offers for Forefront’s assets.
LOL!!!!

nice find!
Relax and be happy.
  • #22
  • Apr 2, 2007 3:10pm Apr 2, 2007 3:10pm
Dr. Janjic was a VP of Sales at CoesFX before going over to CFG Trader. But, the guy I was also referring to was one of the head guys or founders at CoesFX. His name is Michael Todd.

Quoting BeachBum
http://www.zoominfo.com/people/Janji...834178967.aspx
  • #23
  • Apr 9, 2007 7:41am Apr 9, 2007 7:41am
UPDATE (April 06, 2007):
"The Receiver has signed an agreement to sell substantially all of the assets of Forefront Investments Corp., d/b/a CFG Trader to I-Trade FX, LLC. The United States District Court will hold a hearing at 10:00 a.m. on Tuesday, April 10, 2007 to consider approval of the sale. The hearing will be held before the Honorable Robert E. Payne in Lewis F. Powell, Jr. Courthouse at 1000 East Main Street in Richmond, Virginia. If approved, the Receiver will transfer all CFG Trader customer accounts (and certain related assets) to I-Trade FX, which will restore to all customers the value of their accounts at CFG Trader at the time that all positions were liquidated on March 21, 2007 pursuant to the order of the National Futures Association. If approved, the parties expect to close the transaction immediately after the hearing. Customers will receive further information directly from the Receiver and I-Trade FX after the hearing, including procedures for recovering their investment or establishing a new account with I-Trade FX."

Does anybody know this firm I-Trade FX?
  • #24
  • Apr 10, 2007 4:41am Apr 10, 2007 4:41am
Quoting armisz
UPDATE (April 06, 2007):
"The Receiver has signed an agreement to sell substantially all of the assets of Forefront Investments Corp., d/b/a CFG Trader to I-Trade FX, LLC. The United States District Court will hold a hearing at 10:00 a.m. on Tuesday, April 10, 2007 to consider approval of the sale. The hearing will be held before the Honorable Robert E. Payne in Lewis F. Powell, Jr. Courthouse at 1000 East Main Street in Richmond, Virginia. If approved, the Receiver will transfer all CFG Trader customer accounts (and certain related assets) to I-Trade FX, which will restore to all customers the value of their accounts at CFG Trader at the time that all positions were liquidated on March 21, 2007 pursuant to the order of the National Futures Association. If approved, the parties expect to close the transaction immediately after the hearing. Customers will receive further information directly from the Receiver and I-Trade FX after the hearing, including procedures for recovering their investment or establishing a new account with I-Trade FX."

Does anybody know this firm I-Trade FX?
if i was a customer of cfg and once this sale goes thru with i-trade forex i will withdraw all my funds and find a more stable broker.
If I Go Broke Trying Then I Will die happy.
  • #25
  • Apr 10, 2007 9:29am Apr 10, 2007 9:29am
i mean i will do that too, i have a managed account by cfg. have you any idea which broker will be your choice?
  • #26
  • Apr 10, 2007 9:30am Apr 10, 2007 9:30am
See itradefx.com. No MT4 platform. Based in Florida. Available capital $1.8 million (per 1/31/07); capital requirement $1 million, so seems like a fairly small outfit. Given that CFG was short much more, I wonder how realistic this deal is. I would take my money out and run...
  • #27
  • Apr 11, 2007 8:04am Apr 11, 2007 8:04am

FXCM Comments on the CFG Trader Transaction

  1. Yesterday the US District Court in Richmond, Virginia approved the transfer of the assets of Richmond-based CFG Trader, a forex trader, to a South Florida currency broker.
  2. CFG was forced to suspend business on March 21, when the National Futures Association determined that CFG could not meet its capital requirements.
  3. FXCM, headquartered in Wall Street, submitted its own bid for the assets of CFG on March 27, stipulating that it would contribute over $1 million to make sure the CFG trader-clients lost no money.

Today, Drew Niv, CEO of FXCM, had the following comments.

“We are pleased that the trading accounts have been successfully transferred. The client traders will hopefully lose no money because of CFG’s situation.”

“Of course, we are disappointed that our own bid was not accepted. Our bid was designed to cover the gap between the assets and liabilities involving the customer funds, and to make sure that the trader customers didn’t lose any money. The receiver for CFG demanded additional funds for what were described as ‘other assets’ and for receivership fees.”

“We had already spent more than a week in an exhaustive due diligence examination of the company, trying to make sense of a collection of financial records and transactions that were – to put it mildly – unusually assembled. That due diligence process convinced us that the price finally asked was in excess of the actual value of the CFG assets plus the extra receivership costs.”

“I would add that while it is standard business practice in cases like this for the first credible bidder, sometimes called a “stalking horse”, to impose a 3% breakup fee for all the accounting work and for establishing a credible benchmark price, we did not. That fee would have had to come out of customer funds – the very funds we were trying to protect.”

“So, although our bid was not accepted we are confident that we played a vital part in assuring the traders that their funds were safe. As the largest company in the retail forex industry, our being the first – and, for an extended period of time the only – bidder was instrumental in establishing a benchmark value for the CFG assets.”

“Our purpose in making a formal bid was not only to add a few thousand trading accounts to FXCM. As the leading company in the forex industry we see it as our responsibility to the trading community and to the retail currency trading industry itself to ensure that traders’ funds are safe.”

Forex Firms Invited to Join a Safety of Funds PAC


“But as this case should make clear, it is not enough merely to bail out one bankrupt company. CFG was inadequately capitalized, and the NFA is to be commended for suspending them before things got worse for the company and especially for the traders.”

“But we believe that it is vitally important that all currency trading clients have complete and verified information on the financial strength of forex trading firms. That is why FXCM has taken the major step of making our balance sheet public, and challenged other firms in the industry to follow our lead.” (See http://www.fxcm.com/news-release.jsp)


“More importantly, FXCM is in the vanguard of the movement to convince the US Congress to pass legislation ensuring the funds of currency traders against the kind of problem represented by the CFG Trader case. In fact, we have even established a Political Action Committee to support and coordinate the actions of this Safety of Funds initiative, and we have convinced four other large FCMs to add their names to our petitions. We are urging every firm in our industry to join us in this effort.”

# # # #


FXCM Facts



Forex Capital Markets LLC is the Largest Forex Dealer Member*

More than 85,000 live accounts are traded via the FXCM platform

Over $200 billion in notional volume is traded each month on the FXCM platform

Registered with the CFTC as a Futures Commission Merchant, FXCM (Forex Capital Markets LLC) has received numerous awards from the investment community, including Best Currency Broker from Shares, Best Retail Foreign Exchange Platform from FX Week and Best Foreign Exchange Specialist from Technical Analysis of Stocks & Commodities. In addition to currency trading, FXCM offers educational courses on forex trading, and provides research through DailyFX.com.

*As of September 2006, FXCM held in excess of $215 million in customer funds out of a total of over $770 million held by Forex Dealer Members. While there are approximately 31 active Forex Dealer Members with liabilities to customers of approximately $795 million, FXCM holds approximately 1 out of every 3 dollars of customer funds held by Forex Dealer Members.
*Source:
(FXCM is the FDM referenced in this NFA document as holding in excess of $215 million in customer funds.)

# # # #



Leveraged foreign exchange trading carries a high level of risk, and may not be suitable for all investors. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose.
  • #28
  • Apr 11, 2007 9:16am Apr 11, 2007 9:16am
FXCM Rep:

Is there any website about this initiative of Safety of Funds PAC?

Some place for the users can read about and inform?

The users can have a high power writing to a congressman if the proposal is good. And every proposal to ensure the funds is ok.
  • #29
  • Apr 12, 2007 6:51am Apr 12, 2007 6:51am
Quoting zuijlen
See itradefx.com. No MT4 platform. Based in Florida. Available capital $1.8 million (per 1/31/07); capital requirement $1 million, so seems like a fairly small outfit. Given that CFG was short much more, I wonder how realistic this deal is. I would take my money out and run...
I don't know what it is about Florida but I have known a number of people that got involved with FL basd trading companies and have gotten severly burned.........
I myself have been burned by a florida company ...... so as far as I am concerned florida can sink into the swamps and take it's crooks with it.
Same Whore .... Different Dress
  • #30
  • Apr 12, 2007 7:15am Apr 12, 2007 7:15am
Quoting johnedoe
I don't know what it is about Florida but I have known a number of people that got involved with FL basd trading companies and have gotten severly burned.........
I myself have been burned by a florida company ...... so as far as I am concerned florida can sink into the swamps and take it's crooks with it.
you or 100% right, florida is one of those states like an foreign country that produce a lot of illegal business, or also think las-vegas nevada produce a lot of rip-off kind of busniess.
If I Go Broke Trying Then I Will die happy.
  • #31
  • Apr 12, 2007 9:23am Apr 12, 2007 9:23am
Hey Folks,

If you read the website's most recent post, you'll see that all accounts are intact and transferred to IFX. Yes, it is unfortunate that this happened and that the account was frozen for a few weeks, but in the end, minimal loss and a great lesson learned: if you get a warning notice from the NFA on your platform, liquidate immediately and move to another broker.

Best to all, especially the CFG gang who are trying to do the right thing...

Steve
TULKAS
  • #32
  • Apr 12, 2007 10:13am Apr 12, 2007 10:13am
Quoting Tulkas
Hey Folks,

If you read the website's most recent post, you'll see that all accounts are intact and transferred to IFX. Yes, it is unfortunate that this happened and that the account was frozen for a few weeks, but in the end, minimal loss and a great lesson learned: if you get a warning notice from the NFA on your platform, liquidate immediately and move to another broker.

Best to all, especially the CFG gang who are trying to do the right thing...

Steve
Steve,
You say something about getting a warning notice on the platform from NFA, how is that?Did you mean that one has to always be checking the NFA website for any issues with your brokers? Just trying to find out how to be vigilant about this issue and what is the best way to get these warning news so you have enough time to liquidate before the broker goes under.

Thanks
  • #33
  • Apr 12, 2007 7:45pm Apr 12, 2007 7:45pm
Quoting forexplayer
Steve,
You say something about getting a warning notice on the platform from NFA, how is that?Did you mean that one has to always be checking the NFA website for any issues with your brokers? Just trying to find out how to be vigilant about this issue and what is the best way to get these warning news so you have enough time to liquidate before the broker goes under.

Thanks
its best to check n.f.a. website once a week, just hope your broker don't pop up on there website.
If I Go Broke Trying Then I Will die happy.
  • #34
  • Apr 13, 2007 8:14am Apr 13, 2007 8:14am
Moe I do that check every Monday, and I think that is a good idea to be informed about those issues.
  • #35
  • Apr 14, 2007 6:39am Apr 14, 2007 6:39am
I don't think the CFG gang was doing the right the thing. They had their assets frozen by the CFTC and a judge required the liquidation and transfer to the other firm. If they had done the right thing, this mess never would have happened.

Quoting Tulkas
Hey Folks,

If you read the website's most recent post, you'll see that all accounts are intact and transferred to IFX. Yes, it is unfortunate that this happened and that the account was frozen for a few weeks, but in the end, minimal loss and a great lesson learned: if you get a warning notice from the NFA on your platform, liquidate immediately and move to another broker.

Best to all, especially the CFG gang who are trying to do the right thing...

Steve
  • #36
  • Last Post: Apr 23, 2007 5:57am Apr 23, 2007 5:57am
I have a question. Does anyone know what the terms of the agreement to transfer CFG accounts to ItradeFX were? While I'm not a big fan of FXCM, it seems like ItradeFX could easily run into the same problems as CFG. They seem under captalized. Does anyone know exactly what ITFX did to beat FXCM to the punch?

-fxp
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