Brokers taking your money overseas | Forex Factory

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Brokers taking your money overseas

  • #1
  • First Post: Jul 9, 2012 3:24am Jul 9, 2012 3:24am
I recently switched one of my accounts with a broker ( from FXsolutions to Tradestation) and something very interesting happened.

It took a very long time for me to get my check so I called FXsol and asked them about the delay.

After a long time on the phone and being transferred around their departments I got the explanation that the delay was because my check was being issued by their London offices.

London? Why my money is in London if I live in the States?

I did some research about it and I found something that appears to be the reason.

As a brokers I have absolute nothing against FXsol. While I traded with them they never gave me a hard time, but after watching this video I realized that by dealing overseas FXsol was exposing my money to bigger risks.

I'm gonna call the 2 brokers I deal now and ask them where they park my money. I think you should do the same.


Inserted Video
  • #2
  • Jul 9, 2012 8:32am Jul 9, 2012 8:32am
Every time I post something on the broker forum it gets moved here to the " trading discussion" forum.

So today even if my thread was broker related I decided to post it here. FF first moved it to the broker forum than back here, go figure.

FF mods are either drunk or don't really know what they are doing.

In my opinion both!
  • #3
  • Jul 9, 2012 8:57am Jul 9, 2012 8:57am
Thanks for the info. I use fxpro and exness. Will ask them now.
  • #4
  • Jul 9, 2012 11:02am Jul 9, 2012 11:02am
Thanks for posting the video. I am not in the UK but I trade with a UK account for several beneficial reasons.
  • #5
  • Jul 9, 2012 9:35pm Jul 9, 2012 9:35pm
The problem folks is that the brokers are taking our money out of the country where they can leverage it and engage in very risky bets. The regulators lowered leverage for the retail traders with the excuse of "safety"!

In reality what the CFTC did was to force retailers to increase margin. Less leverage means that you have to put more money upfront. They capitalized brokers all over with this measure.

Now the brokers are taking this money to London or other places where they have no leverage limits. And the regulators are doing NOTHING about it.

I wonder how many "MF Global " are out there ready to go broke.
  • #6
  • Jul 10, 2012 2:50am Jul 10, 2012 2:50am
Quoting QuadrupleX
I wonder how many "MF Global " are out there ready to go broke.
More to come, that is for sure.

http://www.forexfactory.com/showthread.php?t=372846
  • #7
  • Jul 10, 2012 3:49am Jul 10, 2012 3:49am
As long as you choose a broker that keeps your moneyin a segregated account, this shoudnt be a concern. Or am I wrong ?
  • #8
  • Jul 10, 2012 5:27am Jul 10, 2012 5:27am
Quoting FoZzyBoy
As long as you choose a broker that keeps your moneyin a segregated account, this shoudnt be a concern. Or am I wrong ?
As long as you find a honest broker you have nothing to worry about. Right?
  • #9
  • Jul 10, 2012 6:07am Jul 10, 2012 6:07am
Slightly off topic, but Man Financial was a reputable firm, and so is PFG Financial. And now this:

http://www.reuters.com/article/2012/...86905120120710

Gotta make you wonder if any broker, anywhere is honest.
  • #10
  • Jul 10, 2012 6:23am Jul 10, 2012 6:23am
Quoting bit9ret
Slightly off topic, but Man Financial was a reputable firm, and so is PFG Financial. And now this:

http://www.reuters.com/article/2012/...86905120120710

Gotta make you wonder if any broker, anywhere is honest.
Just like the guy I quoted used the word "segregated" in a ironic way, I used the word "honest" in a ironic way. You got that, right?
  • #11
  • Jul 10, 2012 6:30am Jul 10, 2012 6:30am
Actually, I didn't read your post, just the first few. Wasn't even paying any attention to poster names. Purely coincidental, I see after the fact, once I read your post for the first time.

In this case, don't ascribe motives where there are none. Got it?

Good post.
  • #12
  • Jul 10, 2012 6:45am Jul 10, 2012 6:45am
By the way I called my brokers yesterday and their answer was vague.

The costumer rep on both of them did not know the answer right the way and after putting me on hold forever in order to speak with some supervisors gave me a lame answer about how they don't do it, how my money is safe etc, etc.

I didn't buy it so I guess I'm gonna have to do some research on my own and try to find the truth.

Some brokers ( Oanda as a example) recently changed CEOs and are under new management. I wonder what it could mean.

I currently trade with InteractiveBrokers (main) and Tradestation (secondary) which are pretty well respected in the business. I'm thinking about a third broker now.

A third broker would theoretically increase my exposure in the sense that I will have one more broker to worry about, but will diminish my chances of losing all my money since a 3 brokers failure is a lot more difficult to happens than 1 or 2 failures.

I really don't know! I'm gonna have to think carefully about it in the next days.
  • #13
  • Jul 10, 2012 6:45am Jul 10, 2012 6:45am
I don't want to hijack your thread, as this is slightly OT again, but this is just totally unbelievable--$5 million in customer funds left out of $225 million:

http://www.theglobeandmail.com/repor...rticle4401803/

"The National Futures Association (NFA), an industry group that also plays a regulatory role, said it had issued an emergency order to effectively freeze PFGBest’s operations after finding that a U.S. bank account the broker said contained $225-million in customer funds actually held only $5-million."

"One former employee of the firm said he had grown concerned that Mr. Wasendorf did not do more to distance the company from a massive $194-million forex-trading Ponzi scheme run by Trevor Cook in Minnesota, who admitted defrauding more than 700 investors. Mr. Cook is serving 25 years in prison.

In February PFGBest, which had acted as Mr. Cook’s broker, was fined $700,000 by the NFA for failing to notice the scheme. The company was subsequently sued for $48-million by the receiver rounding up the assets from Mr. Cook’s scheme."

And this Wassendorf guy is reputable. I've heard his name over the years; he's written stuff on trading. Though the stuff I've heard is that PFG is expensive for clients, fees, etc.
  • #14
  • Jul 10, 2012 6:52am Jul 10, 2012 6:52am
Quoting bit9ret
I don't want to hijack your thread, as this is slightly OT again, but this is just totally unbelievable--$5 million in customer funds left out of $225 million:

http://www.theglobeandmail.com/repor...rticle4401803/

"[i]The National Futures Association (NFA), an industry group that also plays a regulatory role, said it had issued an emergency order to effectively freeze PFGBest’s operations after finding that [b]a U.S. bank account the broker said...
Madoff was also very "reputable" before he got cot.

Unreal how some words like "segregated", "honest", "reputable" etc , are losing their meaning in the economic world.
  • #15
  • Jul 10, 2012 6:54am Jul 10, 2012 6:54am
It's enough to make one pull one's hair out.

Anyway, that's it for me here. Gotta go....
  • #16
  • Jul 10, 2012 6:54am Jul 10, 2012 6:54am
Doesnt InteractiveBroker have minimum deposit of $10,000?



Quoting QuadrupleX
By the way I called my brokers yesterday and their answer was vague.

The costumer rep on both of them did not know the answer right the way and after putting me on hold forever in order to speak with some supervisors gave me a lame answer about how they don't do it, how my money is safe etc, etc.

I didn't buy it so I guess I'm gonna have to do some research on my own and try to find the truth.

Some brokers ( Oanda as a example) recently changed CEOs and are under new management. I wonder what it could mean.

I currently trade with InteractiveBrokers...
  • #17
  • Last Post: Jul 10, 2012 9:07am Jul 10, 2012 9:07am
Fresh article at zerohedge talking about the subject.

In their list my 2 brokers are in the same page right above a hypothetical danger zone ( in yellow ) below.
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