Class Action Lawsuit Against FXCM

Hey Jason, don't forget your Virtual Dealing Plugin and the great innovations that it offers your company. You can slow down clients trades, spike prices at the touch of a button and do all manner of things that will ensure a good profit.

Hopefully all the shysters in the market will get what they deserve soon.

What is it with this MT4 plugin obsession, do you really think other brokers don't incorporate similar technology into their platform and software?

Oh boy, anyway I'm out of this thread if it's gonna end up just an FXCM bashing exercise.....

Oh I see, just because others use sleight of hand too, that makes it all OK does it ?

lol agree

Sleight of hand, or legitimate tactics to protect their bottom line in volatile markets?

I really think we need to weigh up the pros and cons of these brokers. Sure, none of them are snow white but without them our opportunities are limited for trading this market, especially for traders with limited capital.

If regulators and legislators introduce too many restrictions on how they do business then they'll either close up shop because the risks are too high, move their operation to other jurisdictions where there's less regulation, or they'll go bust and we'll end up with 10c in the dollar!

If some traders don't like the way these brokers do business, or they don't like retail forex then there's always other markets to trade!

pipmutt, to each his own. If you think dealing with shysters is for you or your friends, then fine, go ahead but I'd personally prefer the entire fx act be cleaned up and these people dealt with appropriately. If that means it puts fx trading out of the realm of people with 'limited capital' then so be it. We'll be doing most of them a favour anyway.

What is it these shysters are doing that you find so objectionable?

Seriously, maybe if we air our concerns and suspicions in a business-like manner then 'Jason' will reply with a rational and feasible explanation like he just did to dragan. That's got to be better than throwing accusations about and bashing, perhaps there's something we've overlooked or don't understand about why/how they do what they do.

Why not make this thread an educational one about brokers?

There is always forex micro futures that could really do with the liquidty to get going. Regardless of liquidity I am sure execution is fine for small lot sizes. Hopefully the adverse publicity with fxcm will give the micro futures a little lift in liquidity, and hopefully people might realise that trading at a proper exchange is a fairer playing field. There is also LMAX of course (true ECN). Activetrades (MT4) is another that I have had no problems with. So the MT4 buckets aren't all bad.

But, firms with sloppy business practices and 'over advertising' will always be easy targets for bored or losing traders. Its a conflict of interest between client and broker that is part of the business. Clients have every right to go after the broker if they are not supplying the best execution that he or she is paying for. Brokers need to start measuring their own execution quality. But then the client shouldn't come crying if they are paying peanut spreads but getting shit service and execution. You get what you pay for. And given that it would be very difficult for the client to measure the broker's execution, if you are paying big spreads then the client has every right to complain and demand better performance from them.

What should be freely available is a set of statistics over time based on an audit trail that records the submission and disposition of every order. This would keep brokers honest and will give useful stats when making a decision about choosing a broker. The forex is unregulated. Dishonest brokers are to be expected but it doesn't mean we have to sit here and let brokers do what the hell they want. Likewise brokers in unregulated markets have to expect a bit of hassle from their clients. Its the nature of the game. But until this business gets a little more transparent and a little more regulated (which is what the client wants), and unless the bigger brokers, who say they are honest, remain sitting on their hands with regards the process of transparency, then its game on imo, tit for tat.

I think we're all aware of what they're doing and I'm sure they have more tricks up their sleeve that we're not aware of. This has all been dealt with before, so I'm not going to go over old territory. MT4 was built for their benefit which is exactly why they give it away.

But over and above that I don't think the concept of a bookmaker that also has control over the scores and the delivery of those scores is an ethical basis to work from. This is where the act needs to be cleaned up.

There are far too many conspiracists with a lack of facts trudging through here. The bandwagon is bursting over.

I certainly can't speak to any past unofficial operating procedures that FXCM was involved in or even address some of the cases being hauled out here - because none of us know the facts.

But for a company to consistently nickel and dime their customers and employ the wild trickery preached about here on a regular and consistent basis to a vast majority of their customers - is just not a formula for staying in business, and not being found out in some manner.

It's perhaps telling that all the accusations are with accounts of relatively small size, and I would guess individuals without experience. I'm not making a judgement call here, but just using logic: how much effort would be required to pocket a few dollars or dozens and intermittenly hundreds of dollars due to what so many have broadbrushed as consistently applied tactics, used all the time? How could there possibly be a stream of customers constantly going through this, and there are just a handful of complaints - lacking major facts?

And, what is the effort-to-success and risk-to-reward ratio on these types of business practices? Why so much effort to piddly accounts of a few grand? Are the pro accounts with $25/$70/$100k+ seeing the same issues? Where are their complaints?

Would a company who aspires to be a top-tier provider - whether they are or not - make illegitimate dealings as part of their regular operating procedures? Would they be IPO-ing? Would they be carting their CEO/CFO around Bloomberg & other major networks to expose him, because they are so successful at screwing customers?

It's amazing how the bandwagon builds on this, truthers 'et all.

I agree with u but we cant easily dismiss the possibility of some tricks here and there like hanging orders or delayed execution for some traders especially the big one , i am not talking about a "business module " but some tricks between now and then is not far from being realistic ...

FXCM have previous form and are tainted by their association with crooks:

5/30/06 - Final Judgment entered. Restitution of $2,752,377.50 joinlty owed. Commodity Futures Trading Commission Office of External Affairs (202) 418-5080
Three Lafayette Centre
1155 21st Street, NW
Washington, DC 20581


Release: 5192-06
For Release: June 27, 2006

Federal Court Issues Final Judgment in Trial of Fraud Action Brought by U.S. Commodity Futures Trading Commission

Gibraltar Monetary Corporation, Inc. and Employees Jayson Kline, Charles Fremer and Edward Johnson Ordered to Pay Over $2.7 Million to 253 Foreign Currency (Forex) Options Customers

Washington, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) announced today that on May 30, 2006, the Honorable U.S. District Court Judge William P. Dimitrouleas of the U.S. District Court for the Southern District of Florida issued a final judgment against Gibraltar Monetary Corporation (Gibraltar), a Florida corporation, and three employees for defrauding the company’s foreign currency options customers. The employees found liable for violating federal commodity laws are Gibraltar President Jayson Kline of Boca Raton, Florida; Vice President Charles Fremer of Coral Springs, Florida; and senior account executive Edward Johnson of Wellington, Florida. This order follows an eight-day non-jury trial on a complaint the CFTC filed on February 10, 2004 (see CFTC News Release 4892-04, February 11, 2004).

The complaint alleged that beginning in May 2002, Gibraltar, Kline, Fremer, Johnson, and Gibraltar’s compliance manager Thomas Clancey, of Sunrise, Florida, fraudulently solicited members of the retail public to trade foreign currency options through Forex Capital Markets, LLC (FXCM), a New York-based foreign currency dealer. The complaint also alleged that Gibraltar failed to disclose that Kline had previously been enjoined by a federal court from committing solicitation fraud in connection with commodity options, and that the CFTC had issued a cease and desist order against Kline, also prohibiting him from committing options fraud (CFTC Docket No.94-8, December 9, 1993). Prior to trial, Clancy entered into a settlement agreement with the CFTC and testified on behalf of the CFTC at trial. FXCM, which was charged in the complaint with liability as a principal for the acts of Gibraltar, denied the allegations of the complaint and defended itself at trial.

The order entered by Judge Dimitrouleas finds that Gibraltar and its employees repeatedly made fraudulent misrepresentations and misleading statements to persons they solicited about the likelihood of profiting from trading foreign currency options, while failing to disclose that the vast majority of Gibraltar’s customers were losing money. Indeed, the court noted that nearly 95% of Gibraltar’s customers lost most, if not all, of their investments. The order also finds that Kline, in his capacity as a controlling person of Gibraltar, violated the terms of the CFTC’s December 9, 1993, cease and desist order. Judge Dimitrouleas ordered Kline, Fremer, and Johnson to repay $2,752,337.50 to Gibraltar’s customers, and imposed a total of $783,378 in civil penalties against the three individual defendants. The order also permanently prohibits Kline, Fremer, and Johnson from engaging in any commodity-related activity in the future.

I think they'll also need to bring down commissions if they ever expect to lure punters through the door, as it is it's not a cost effective alternative.

Excellent idea, now that's worth petitioning for more than leverage and nedging! Is there any reason why that couldn't be done?

Especially seeing as the vast majority will eventually give their money away without any help or hindrance anyway!

I wonder if there's any truth to the rumour that brokers categorize clients into groups ie consistent winners, consistent losers and handle their (excess) trades accordingly. It would seem to make perfect sense from a business perspective, why give their money to the market when you can keep it in-house, it's not going to make any difference to the client.

And just how are they tainted?

If I buy a Ford sedan or better yet a pickup truck and run a bunch of pedestrians over.

Does Ford have any fault in that?

Looks like FXCM stock is being hit hard by this case.

http://finance.yahoo.com/echarts?s=f...urce=undefined

i think we found a good way to make money lol

stock anit looking so healthy, about time this bullshit machine gets brought in.........

I actually prefer FXCM as a broker, they are quick with the withdrawal requests, customer service is pretty good. I refer traders to FXCM every week of the year, but I have to laugh when the Active Trader account is the reason why the spreads differ.

Why would an Active Trader account have greater spreads than a standard account?

I'm short FXCM and feeling good about it......

I just have to keep my eyes on it to cover slightly before the stock goes to zero so my money don't get stuck.....