Broker fraud? Is it possible? | Forex Factory

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Broker fraud? Is it possible?

  • #1
  • First Post: Oct 30, 2014 11:31am Oct 30, 2014 11:31am
There are many discussions/reviews about good or bad services of brokers. I am curious if it is also possible/common that a broker run a Ponzi game, and take the money and run? When choosing a broker, should we consider this factor too? (if yes, how?)

Or is it possible to lose our money because of the broker's (or its parent company) bankruptcy?

In years, I haven't heard that clients have lost their money given to a regulated broker. Has it happened ever?

In general, forex is a high risk investment, should we consider the risk of bad broker too?

Note that I am talking about NFA or FCA-regulated brokers.
  • #2
  • Oct 30, 2014 12:19pm Oct 30, 2014 12:19pm
Quoting etrade
There are many discussions/reviews about good or bad services of brokers. I am curious if it is also possible/common that a broker run a Ponzi game, and take the money and run? When choosing a broker, should we consider this factor too? (if yes, how?) Or is it possible to lose our money because of the broker's (or its parent company) bankruptcy? In years, I haven't heard that clients have lost their money given to a regulated broker. Has it happened ever? In general, forex is a high risk investment, should we consider the risk of bad broker too?...
How is it possible that you haven't heard of such cases is beyond me. The first three that come to mind: Refco, MF Global, PFG...
I'm not insane; my mother had me tested.
  • #3
  • Oct 30, 2014 3:11pm Oct 30, 2014 3:11pm
Quoting RoBiK
{quote} How is it possible that you haven't heard of such cases is beyond me. The first three that come to mind: Refco, MF Global, PFG...
I had heard about MF Global, but I had no idea how the bankruptcy affected the clients. Did they all lose their money? (simply!)

How one can avoid this?

Of course, a bank also may bankrupt but it is unlikely. Is there a broker that we feel safe when putting a huge amount of money with it (like we have money in bank)?
  • #4
  • Oct 30, 2014 3:15pm Oct 30, 2014 3:15pm
Quoting etrade
{quote} I had heard about MF Global, but I had no idea how the bankruptcy affected the clients. Did they all lose their money? (simply!) How one can avoid this? Of course, a bank also may bankrupt but it is unlikely. Is there a broker that we feel safe when putting a huge amount of money with it (like we have money in bank)?
I believe Citi FX accounts are FDIC insured.


"CitiFX ProSM US Dollar Margin Now Covered by FDIC Insurance"
http://www.bloomberg.com/apps/news?p...d=amKAYDYClsh8
  • #5
  • Oct 30, 2014 4:58pm Oct 30, 2014 4:58pm
Quoting teddybomber
{quote} I believe Citi FX accounts are FDIC insured. "CitiFX ProSM US Dollar Margin Now Covered by FDIC Insurance" http://www.bloomberg.com/apps/news?p...d=amKAYDYClsh8
Usually, Bank Brokers are safer in this regard, but their conditions are not as attractive as normal brokers (high initial deposition and spreads). The problem is that there are not many options.
  • #6
  • Oct 30, 2014 5:29pm Oct 30, 2014 5:29pm
Single bank portals do not offer the flexibility of brokers.. Its one platform in citibanks case saxo whitelabel.
  • #7
  • Oct 30, 2014 5:59pm Oct 30, 2014 5:59pm
My opinion: NFA is pretty agressive at enforcing unfair broker behaviour, i am reasonably sure they would wipe the floor with forex.com with what they pulled in the other thread, if that would have happed in the states. The downside of NFA regulation is that you are not protected against broker bankruptcy.

For UK/FCA its the other way round: you are protected for up to 50K GBP in case of a bankruptcy, but they are more or less useless for everything else.
  • #8
  • Oct 30, 2014 7:13pm Oct 30, 2014 7:13pm
No matter how much regulation there is, there will always be someone that tries to take shortcuts to make more money.
MF global & PFG were both US regulated companies & yet both found ways around the regulations for a while before they were caught & by that time it was too late. MF global customers finally received 100% of the funds back (after banks paid huge fines for being involved in the mess) but PFG customers have received 37% so far & will probably get around 50% unless more lawsuits produce more funds. Regulations are getting tighter but there will never be a 100% secure broker IMHO unless they create an insurance program to protect the deposits.
  • #9
  • Oct 30, 2014 7:32pm Oct 30, 2014 7:32pm
let's see what happens to yunben first, forex.com and ironfx is using a trick call arbritrage latency. They use slow bad severs so it have price latency with Dukascoppy and they can cancel any profitable trade you make legally. Are other regulated brokers going to use this trick? I don't know, the only reliable brokers are big or bank related brokers :Saxo bank,Dukascoppy,Citifx pro
  • #10
  • Oct 30, 2014 11:36pm Oct 30, 2014 11:36pm
I also add one question. whats about broker hidden charge, if anyone have idea please info me. i trade on instsforex and face that problem. their have lot of hidden charge
  • #11
  • Oct 31, 2014 2:48am Oct 31, 2014 2:48am
Quoting muhitalam
I also add one question. whats about broker hidden charge, if anyone have idea please info me. i trade on instsforex and face that problem. their have lot of hidden charge
you had been scam

Try withdraw your money, guess what, you can't, cause they are criminal
  • #12
  • Oct 31, 2014 3:29am Oct 31, 2014 3:29am
Quoting love.l0ve
{quote} you had been scam Try withdraw your money, guess what, you can't, cause they are criminal
Yes, you are right
  • #13
  • Oct 31, 2014 4:39am Oct 31, 2014 4:39am
Quoting muhitalam
I also add one question. whats about broker hidden charge, if anyone have idea please info me. i trade on instsforex and face that problem. their have lot of hidden charge
Even if you trade with NFA brokers they can rob your money, and you trade with non regulated broker? Say goodbye to your money from when you deposit=)))
  • #14
  • Oct 31, 2014 4:43am Oct 31, 2014 4:43am
Quoting Abcxyz77
{quote} Even if you trade with NFA brokers they can rob your money, and you trade with non regulated broker? Say goodbye to your money from when you deposit=)))
Hello Abcxyz77,

So where my money safe? you guys make me confused. now i am worry about that .....
  • #15
  • Oct 31, 2014 5:03am Oct 31, 2014 5:03am
city index
Interactive broker
IGmarket

They do bussiness long time ago, maybe older than your age
  • #16
  • Oct 31, 2014 6:49am Oct 31, 2014 6:49am
Quoting love.l0ve
city index Interactive broker IGmarket They do bussiness long time ago, maybe older than your age
Yes they elder then me LoL. Thank you very much for this info. By the way, you trade which broker ?
  • #17
  • Oct 31, 2014 7:24am Oct 31, 2014 7:24am
i now trade with IGmarket, if you want to test small amount
Interactive broker, you need deposit huge amount to trade with them, about 5000 - 10000$. But worth it
  • #18
  • Oct 31, 2014 12:31pm Oct 31, 2014 12:31pm
Quoting love.l0ve
i now trade with IGmarket, if you want to test small amount Interactive broker, you need deposit huge amount to trade with them, about 5000 - 10000$. But worth it
yes, i am going to test. But i am worry about deposit amount
  • #19
  • Nov 4, 2014 8:14am Nov 4, 2014 8:14am
Quoting muhitalam
I also add one question. whats about broker hidden charge, if anyone have idea please info me. i trade on instsforex and face that problem. their have lot of hidden charge
Thanks God, i've never traded with this broker..
  • #20
  • Last Post: Nov 4, 2014 11:35pm Nov 4, 2014 11:35pm
Quoting ddeeen
{quote} Thanks God, i've never traded with this broker..
Yes ddeeen. if you don`t trade with this broker then you are lucky. be careful bro about this type broker.
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