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Is NFA doing enough?

  • #1
  • First Post: Oct 26, 2007 12:57am Oct 26, 2007 12:57am
We have heard lots of NFA listed broker frauds but is NFA doing anything in protecting our money?

In my personal experience, I have to say that NFA is nothing more than an organization, created by the brokers themselves, to make it appear to traders, that they are doing something to protect the trader - but the reality is, it is not protecting us and rather the opposite - protecting the brokers instead.

Currently, NFA is busy with the NET-CAP increase. What is this issue all about?

From my point of view, instead of actively going against erring brokers, this NET-CAP issue is to prevent ill-funded brokers from making business. One of the reasoning is that ill-funded under-capitalized brokers are cheaters. Well, does that imply well-funded brokers dont cheat? The answer is NO! Big brokers cheat too.

I am not against the NET CAP increase - i personally welcome it. But I beg NFA to take more actions against cheater brokers who'd stole money from us.
  • #2
  • Oct 26, 2007 11:45pm Oct 26, 2007 11:45pm
Quoting BurgerKing
We have heard lots of NFA listed broker frauds but is NFA doing anything in protecting our money?

In my personal experience, I have to say that NFA is nothing more than an organization, created by the brokers themselves, to make it appear to traders, that they are doing something to protect the trader - but the reality is, it is not protecting us and rather the opposite - protecting the brokers instead.

Currently, NFA is busy with the NET-CAP increase. What is this issue all about?

From my point of view, instead of actively going against erring brokers, this NET-CAP issue is to prevent ill-funded brokers from making business. One of the reasoning is that ill-funded under-capitalized brokers are cheaters. Well, does that imply well-funded brokers dont cheat? The answer is NO! Big brokers cheat too.

I am not against the NET CAP increase - i personally welcome it. But I beg NFA to take more actions against cheater brokers who'd stole money from us.
As I posted in the Net Capital thread, the NFA is just a member association with no legal authority themselves. It's a "members only" self regulating body, which is better than nothing, but they aren't a government agency. The FSA in Great Britian IS a government agency as far as I'm aware, so if you have a British broker regulated by the FSA, your money is actually safer there.

I think the cap increase and the NFA as an association are good things for sure, but I wouldn't put a lot of faith in any broker just because they're an NFA member and have $5MM. Like Burger King says, they can still cheat, steal, whatever.

Let the buyer beware!
  • #3
  • Apr 29, 2009 12:07am Apr 29, 2009 12:07am
Quoting BurgerKing
We have heard lots of NFA listed broker frauds but is NFA doing anything in protecting our money?

In my personal experience, I have to say that NFA is nothing more than an organization, created by the brokers themselves, to make it appear to traders, that they are doing something to protect the trader - but the reality is, it is not protecting us and rather the opposite - protecting the brokers instead.

Currently, NFA is busy with the NET-CAP increase. What is this issue all about?

From my point of view, instead of actively going against erring...

This new NFA rule which makes me lose money claiming it saves me from losing a spread but in facts it makes me lose a whole position.

And if I run 2 expert advisors and let's say the second EA , let's say might open an opposite position , this opposite position will be automatically closed with this new rule , thus making me to lose big, screwing the whole strategy ...WHAT PROTECTION is this ?

NFA , please, you should protect traders by not allowing REQUOTES , OFF QUOTEs, and other errors which appear when you want to close a winning trade , why these errors appear mostly on winning trades ?

Also protect us against stop hunting , over-slippage and artificial -broker spikes which are obvious when comparing quotes with an ECN broker, NFA please don't protect me against a lousy 3 pips spread, it's RIDICULOUS.

Folks , let's make a list of metatrader-no NFA brokers please, i need a couple of them...thank you
  • #4
  • Apr 29, 2009 5:10am Apr 29, 2009 5:10am
Quoting Redox77
NFA , please, you should protect traders by not allowing REQUOTES , OFF QUOTEs, and other errors which appear when you want to close a winning trade , why these errors appear mostly on winning trades ?
Also protect us against stop hunting , over-slippage and artificial -broker spikes which are obvious when comparing quotes with an ECN broker, NFA please don't protect me against a lousy 3 pips spread, it's RIDICULOUS.
The reasons for the NFA to ban hedging are really trivial. Although I agree with you, it is a loss of time complaining to the NFA about broker games as they wont do anything about it. How do you think that Bernie Madoff got away with running his massive Ponzi scheme under the noses of regulators? Retail brokers get away with all that you quoted above including their favourite game 'Virtual Dealer Plug-in' because they make their own rules in an unregulated forex market.
  • #5
  • Apr 29, 2009 6:51pm Apr 29, 2009 6:51pm
Quoting Redox77

NFA , please, you should protect traders by not allowing REQUOTES , OFF QUOTEs, and other errors which appear when you want to close a winning trade , why these errors appear mostly on winning trades ?
I work for a german bank and we offer MT and we have a connection into an ECN platform. So, there are no requotes. You will only see requotes with brokers/banks that are making markets. Keep in mind, even in the higher level, when you trade with banks, they can simply not quote you at all. I'd rather receive a requote than no price at all. The major banks I have traded with can be worse then the retail brokers. I would suggest you try to find a company that is regulated and that offers a connection into an ECN platform. Regarding Off quotes in MT platform, this can most likely a disconnect in the connection between your platform and the server. Which broker do you trade with now?
  • #6
  • Apr 29, 2009 7:21pm Apr 29, 2009 7:21pm
Quoting rnettles
I work....
The famous Mr. Ryan Nettles? Is that you?
  • #7
  • Apr 30, 2009 2:54am Apr 30, 2009 2:54am
Hi Shrike, I didn't realize I was famous.
  • #8
  • Apr 30, 2009 6:48am Apr 30, 2009 6:48am
Quoting rnettles
I work for a german bank and we offer MT and we have a connection into an ECN platform. So, there are no requotes. You will only see requotes with brokers/banks that are making markets. Keep in mind, even in the higher level, when you trade with banks, they can simply not quote you at all. I'd rather receive a requote than no price at all. The major banks I have traded with can be worse then the retail brokers. I would suggest you try to find a company that is regulated and that offers a connection into an ECN platform. Regarding Off quotes in MT...
Hi , ok I believe you but is very weird to get "not quote at all" considering there is always a bid and an ask price especially in forex market where the daily turnover capital is 30 times or more than in the stock market .

-Seems your bank quote provider is not good and maintaining such a quote provider means the bank manager must be changed for maintaining a lousy quote provider, maybe thats a reason many banks are going bankrupt , just joking.

My net connection is v good on other demo acnt with no metatrader i'm not getting these "invalid price" errors just and the claimed spread is not respected compared with the situation the order would have been fulfield with no errors.
  • #9
  • Apr 30, 2009 7:35am Apr 30, 2009 7:35am
Quoting Redox77
This new NFA rule which makes me lose money claiming it saves me from losing a spread but in facts it makes me lose a whole position.

And if I run 2 expert advisors and let's say the second EA , let's say might open an opposite position , this opposite position will be automatically closed with this new rule , thus making me to lose big, screwing the whole strategy ...WHAT PROTECTION is this ?

[color=black][font=verdana]NFA , please, you should protect traders...

Come to Europe... it's a better place to trade
  • #10
  • Apr 30, 2009 10:07am Apr 30, 2009 10:07am
Quoting rnettles
Hi Shrike, I didn't realize I was famous.
Or should i say infamous? You are a bldy superstar. Maybe you could say a few words what you think about the following:

http://www.forexfactory.com/showthre...es#post1748045

It would appear you left quite a few financial corpses behind. Don't those Varengold dudes have any problem with your past?
  • #11
  • May 1, 2009 3:19am May 1, 2009 3:19am
Quoting Redox77
Hi , ok I believe you but is very weird to get "not quote at all" considering there is always a bid and an ask price especially in forex market where the daily turnover capital is 30 times or more than in the stock market .

-Seems your bank quote provider is not good and maintaining such a quote provider means the bank manager must be changed for maintaining a lousy quote provider, maybe thats a reason many banks are going bankrupt , just joking.

My net connection is v good on other demo acnt with no metatrader i'm not getting these "invalid...
The big banks are just as much out to make money from traders as the brokers are. I used to work in a US bank and I remember our dealers traded thru "the world's largest FX liquidity provider" bank. I'm sure you can guess who. And during news many times, they wouldn't show any bids or offers on their platform or they would go so wide that you can get a better rate at an airport. This is the risk if you are trading through one broker or bank market maker. This is why platforms like currenex, integral and other ECN platforms have become popular because they take multiple bank liquidity and aggregate them to show the trader the best bid/offer between all of them.
  • #12
  • May 1, 2009 4:42am May 1, 2009 4:42am
Quoting shrike
It would appear you left quite a few financial corpses behind. Don't those Varengold dudes have any problem with your past?
Shrike, as you know you shouldn't believe everything you read on forums and thanks for asking me to explain a few things.

I would say my past is very good I was a NFA regulated broker since 1997 but unfortunately I worked for 2 firms that were problems. I'll explain below exactly.

Tradex Group LLC. Before I joined Tradex Group LLC, I was global head of sales in the FX department at Commerce Bank & Trust. Commerce Bank at that time was the only US bank that offered retail margin FX trading. I worked at Commerce Bank from Dec. 2003 to Dec. 2004. I left the bank because they decided to sell their FX department to IFX Markets and I didn't feel I wanted to work for IFX because I heard about their execution problems. So, I got a better offer from Nick VanRensburg, who is the owner of Tradex Handel & Beratungs AG aka Tradex Swiss AG, to come work for his organization, but my role was to establish Tradex Group LLC as a CTA and refer forex customers to Tradex Handel & Beratungs. So, I hired a trader who was trading bond futures successfully, and we were also an IB to Tradex Handel and Beratungs for Forex and an IB to Alaron Trading, a US FCM, for Futures. So, if anyone wanted a managed account, they would open with Alaron and Tradex Group would have POA over the clients accounts. If somone wanted to open a forex account, we would refer them to Tradex Handel & Beratungs. We didn't manage any accounts on forex and we referred perhaps only 30-40 self directed customers to Tradex Handel & Beratungs. It was one day in I believe March or April 2006, the NFA came to my office and did their standard audit of the firm. So, they went through everything as normal and all was fine except the fact that I wasn't able to direct forex customers to a swiss broker being a member of the NFA. I had quit Tradex Group in April 2006 due the fact that I couldn't anymore introduce forex customers to the parent company and the trader who was managing futures accounts, wasn't performing well either. Regarding the NFA, I never was fined or any action against me. Regarding Craig Karlis and Nick Van Rensburg, when I was trying to take my customers out of Tradex Handel & Beratungs, they were bad mouthing me to them to try to keep them at Tradex. Luckily, all my customers left the firm and went to other firms.

Here is the link to the NFA complaint against Tradex Group. http://www.nfa.futures.org/BasicNet/...spx?seqnum=750

Here is the link to the NFA decision against Tradex Group.
http://www.nfa.futures.org/BasicNet/...px?seqnum=1031

A word of advice to NFA regulated introducing brokers. I would suggest if you are going to due business with anyone other then a NFA member, I would suggest you seek advice before you engage in doing business with non member firms. As you can see above with Tradex Group, the NFA required Tradex Group to pay back any losses to US customers. Lucky for Tradex Group it wasn't much to pay.

Tradeco Clearing Group. I worked there from July 2006 to April 2006. This firm was a startup FCM. They lost their principal and came calling me to help them. I agreed and worked as their COO in July 2006. The firm was deficient in many things and I basically was hired to get everything organized. They had at the time perhaps 5 customers and they were using the same platform as CMS forex, I don't recall the name of it exactly. Anyway, due to all the deficiences, I told the owners, Marcellus Lee and Daniel Romero, to close the platform until we get all things in order, then we can open again. So, 2 weeks after I started at the firm, the NFA comes with their team to do the audit. Obvioiusly I knew it wasn't going to be good. I tried to explain to them I just started there and am working on getting everything in order. Before I started there, the firm wasn't even giving account numbers to the customers. Before the audit was over, the investor of Tradeco decided to pull out his investment which caused the firm to fall under net capital. So, I helped the firm to negotiate a branch office deal with Direct Forex in Chicago before I left the company.

Here is the NFA complaint letter for Tradeco. Unfortunately, I was the only registered series 3 person fro the firm. We only had 1 other employee at the time other them me, who was just an assistant. http://www.nfa.futures.org/BasicNet/...px?seqnum=1332

Here is the NFA decision letter. I wish I had money at the time to fight the NFA, because I felt their decision upon myself was rather harse since I worked their only 2 weeks before they came in with their audit.
http://www.nfa.futures.org/BasicNet/...px?seqnum=1481

A word of advice to fellow NFA members, before starting with a new firm do your background checks on them and make sure they are in compliance before you join them.

Regarding Varengold Bank, of course they are aware of my work experience. I have helped this bank grow alot in the forex business. I have been with them since January 2008.

Shrike, I hope I clarified everything for you.
  • #13
  • May 1, 2009 1:56pm May 1, 2009 1:56pm
Quoting rnettles
The big banks are just as much out to make money from traders as the brokers are. I used to work in a US bank and I remember our dealers traded thru "the world's largest FX liquidity provider" bank. I'm sure you can guess who. And during news many times, they wouldn't show any bids or offers on their platform or they would go so wide that you can get a better rate at an airport. This is the risk if you are trading through one broker or bank market maker. This is why platforms like currenex, integral and other ECN platforms have become popular...

I agree Nettles , an ECN broker is the way, but I need one accepting minimum deposits ..seems MB Trading accepts min 400 but for now MB Trading has not Metatrader for live accounts, only for demo accounts for now...

Don't know about Interactive Brokers , i heard they are also kind of ECN..

It's obvious working at these banks and not only ..you are an experienced man, may I have a recomandation of a broker , I prefer European one ?

I thought the one is Alpari uk but i see NFA is there too , maybe due they have a branch in us too...

Well I don't know what to say anymore, i thought NFA is a must for a broker for safety , ( till now i was searching a broker beeing NFA regulated , I considered that is a must...) , i still think is good for safety of the money , but i think the NFA no hedging rule did a bad bad bad thing.

Many pips Nettles
  • #14
  • May 2, 2009 4:13am May 2, 2009 4:13am
Quoting Redox77
I agree Nettles , an ECN broker is the way, but I need one accepting minimum deposits ..seems MB Trading accepts min 400 but for now MB Trading has not Metatrader for live accounts, only for demo accounts for now...

Don't know about Interactive Brokers , i heard they are also kind of ECN..

It's obvious working at these banks and not only ..you are an experienced man, may I have a recomandation of a broker , I prefer European one ?

I thought the one is Alpari uk but i see NFA is there too , maybe due they have a branch in us too...

Well...
Are you looking for a broker that offers a MT platform connected to an ECN platform in Europe or would a broker that just has an ECN platform be good as well.

Regarding Interactive brokers, yes they offer an ECN style platform. But, I dont know if they allow hedging. Also, their front end seems better for traders looking for execution only. It doesn't have the analytics like Tradestation or Metatrader. 10,000 min.

Dukascopy has an ECN style platform, but I would not suggest them unless they get their licenses completed in Switzerland. 50,000 min.

Varengold Bank has a MT platform connected to Currenex. 2500 USD minimum

Swiss PB has an ECN platform and they are a licensed broker in Switzerland that also applied for the bank licensee as well. I hear they maybe purchasing MT and connecting it to Currenex. Not sure what their minimum is.

I can't think anymore right now, perhaps the group can provide other names. I hope this helps.
  • #15
  • May 2, 2009 3:11pm May 2, 2009 3:11pm
Quoting rnettles
Are you looking for a broker that offers a MT platform connected to an ECN platform in Europe or would a broker that just has an ECN platform be good as well.

Regarding Interactive brokers, yes they offer an ECN style platform. But, I dont know if they allow hedging. Also, their front end seems better for traders looking for execution only. It doesn't have the analytics like Tradestation or Metatrader. 10,000 min.

Dukascopy has an ECN style platform, but I would not suggest them unless they get their licenses completed in Switzerland. 50,000...
Thank you Nettles
Many pips http://www.forexfactory.com/images/icons/icon7.gif
  • #16
  • May 2, 2009 5:14pm May 2, 2009 5:14pm
The NFA shouldn't exist in the first place. Licensing and regulatory fees simply serve to increase spreads, commissions, etc. The reason sites like this exist is to inform you of fraudulent services. Rely on the market, not regulators who have failed time and time again (e.g. SEC & Madoff).
  • #17
  • May 3, 2009 6:53am May 3, 2009 6:53am
Quoting krazy kaju
The NFA shouldn't exist in the first place. Licensing and regulatory fees simply serve to increase spreads, commissions, etc. The reason sites like this exist is to inform you of fraudulent services. Rely on the market, not regulators who have failed time and time again (e.g. SEC & Madoff).
Indeed those regulators failed on that case...

Someone ( NFA ) is limiting the options someone else has ( traders ) and that is claimed as beeing "help" ?!
  • #18
  • May 4, 2009 1:55am May 4, 2009 1:55am
Quoting krazy kaju
The NFA shouldn't exist in the first place. Licensing and regulatory fees simply serve to increase spreads, commissions, etc. The reason sites like this exist is to inform you of fraudulent services. Rely on the market, not regulators who have failed time and time again (e.g. SEC & Madoff).
I definitely think regulation should exist, but the regulators should have industry experience, not just lawyers that took a few finance courses during school. I have dealt with regulators from the NFA, FDIC and FINMA. All of them don't have a clue regarding what they are auditing. I have no experience with the NASD/SEC who regulates stock brokers in the US, but I'm sure many of them don't have a clue either. There are two reasons how Madoff got away with it so long, either he was paying off some SEC/NASD officials or the people auditing Madoff didn't even know what they were auditing and Madoff was able to hide things easily from the SEC's lack of experienced auditors.

Also, regarding the market regulating the firms. This will not work, many people who post messages about firms are alot of times competitors stating bad things about each other. Also, many investors who get taken by fraudulent firms may not have internet access so they can't do their research on the companies they do business with. So, definitely there must be a government regulator monitoring these firms. I just think these regulators should have industry experience of 5-10 years minimum in order to get a job with them.
  • #19
  • May 4, 2009 8:13am May 4, 2009 8:13am
[quote=rnettles;2710806]I definitely think regulation should exist,quote]


Very true , regulation should exist, otherwise all brokers wil run away with money , but they should do it for helping traders more,not brokers.
  • #20
  • May 4, 2009 8:20am May 4, 2009 8:20am
Quoting rnettles
I have dealt with regulators from the NFA, FDIC and FINMA.
What is FINMA?
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