I did have very negative experiences with IBFX. They stopped me out at least 2 times around 20 pips below the market prices. I won't trade with IBFX any more.
I know what you mean. They are sneaky with random spread widening too.
__________________ Private HYIP - 21% daily for 21 days! Online for around an year. Accepts LR, PM, and Pecunix. CLICK HERE & HERE for payment proof. E-mail me for details: jstevens090@gmail.com
1) Some kind of formal statement by either the CFTC or the NFA in which CFTC signs off on the NFA proposal (or the unlikely prospect of the CFTC rejecting it.)
2) The new updated CFTC Adjusted Net Capital Report which will be published here: http://www.cftc.gov/marketreports/fi...fcms/index.htm
The next updated adjusted net capital report will be particularly revealing. All the firms on this report will have had several months since the proposal was issued to start increasing their reported net capital. While no firm is required to hike their capital yet it will be very telling to see which firms have begun to prepare for the inevitable and which firms continue to hold their cards close to their vest. At this point any firm that isn’t ponying up the dough to capitalize themselves on these reports is really begging the question: is this firm destined to be strapped into the forex dealer electric chair? Or will they get a stay of execution?
My advice to the firms in the Dead Pool is simple: put up the money now and save everyone the trouble of guessing whether or not you will be here a few months from now. If your company capital is tied up and not available at the moment, well, tell the public what it is tied up in and specifically why you are not reporting it. Customers who open accounts with forex brokers are required to detail their own private financial holdings. In light of the seriousness of the capitalization issue, I think forex brokers should be held to the same standard.
The Mainstream Media is starting to pick up on the Tradex Swiss AG debacle that I have been covering the last few weeks. Let this be a warning to anyone trading with an unregulated Swiss Firm what can potentially happen to you.
The Following Swiss Forex Brokers are unregulated just like Tradex Swiss
WestCapFX
ACM
MIG
DukasCopy
GFX Group (Forex.CH)
Crown Forex
A Swiss-owned currency trading shop that was operating out of downtown Boston had its assets frozen by investigators from its home country and also is being investigated by Massachusetts authorities, according to court documents and multiple sources.
Tradex Group LLC was managing at least $5 million for its clients, some of whom have gone to court in a bid to prevent any transfer of funds out of a Bank of America account based in a Boston branch.
Tradex faces problems on both sides of the Atlantic.
While the scope of the Massachusetts investigation is unclear, it is clear from public documents that the operation was running without having registered with the state, according to a spokesman for Secretary of State William F. Galvin.
While failing to register as a securities business, Tradex did file articles of incorporation with the state in 2004. Also in the U.S., the National Futures Association, whose members trade futures including foreign currency, banned Tradex from taking part in trading on behalf of American clients in January.
The NFA alleged in a complaint posted on the group's Web site that Tradex erred by soliciting investments for its Swiss parent company, which was not registered to do business on behalf of U.S. clients.
Additionally, the Swiss Federal Banking Commission, which froze Tradex's assets in July, attributed the action to "licensing issues," according to people close to the situation. Representatives of the association declined to comment for this story.
But court filings by other parties indicate that Tradex's parent and a sister company were not properly registered in Europe.
Officials at Tradex's parent have been quick to distance themselves from the matter. In an e-mail to the Boston Business Journal, Tradex Swiss AG CEO Nicolaas Jansen van Rensburg said the Boston group's problems rest solely on the shoulders of its local employees.
"I wish to point out that Tradex Group LLC is not our company. Tradex Swiss AG was a shareholder in the company," wrote van Rensburg. "Tradex Swiss AG was NOT involved in the running of the business."
Meanwhile, the legal fight over the status of the frozen $5 million is underway.
The former manager of the Boston office, Craig Karlis of Hopkinton, and three investors filed suit last month trying to block any transfer of the money. Karlis said he's owed unspecified back wages.
"Craig Karlis and the other employees took it upon themselves to hire an attorney in an attempt to ensure that their clients' money is protected throughout the Swiss investigation," said Liam Floyd, the attorney representing Karlis and investor George Popescu.
Joshua Cook, attorney for Wei Zheng and Pei Zhen Xin, the other investors involved in the suit, said his clients deposited $200,000 into the account after it was frozen by the Swiss investigators.
He added that he has received inquiries from about another 100 concerned investors.
Cook said his clients sued out of fear that their money will be used to satisfy other creditors' claims.
Cook alleged that many currency traders "fail to adequately disclose the risks" associated with their businesses, but he did not link the broad statement to his clients' case.
A Tradex officer said in an affidavit that "the trading agreements make clear (that) commodities investments are highly risky and highly speculative."
According to court filings, the Swiss investigators argued it was necessary to freeze the Bank of America account to ensure that Tradex's assets are not improperly disbursed. The Swiss regulators said they plan to pay employees back wages once the investigation is complete.
Attorney Evan Fray-Witzer, who is representing the Swiss investigators and Tradex Swiss, did not return calls seeking comment.
On Aug. 16, Judge Alan van Gestel of the business litigation session in Suffolk Superior Court ruled that as the proceedings continue, the Swiss authorities can access all but $500,000 of the money in the now-frozen Bank of America account.
Members of secretary Galvin's staff declined to say what the next step for his office will be.
A spokeswoman from the National Futures Association said any allegations of illegal futures trading would be referred to the U.S. Commodity Futures Trading Commission for investigation.
The commission neither confirms nor denies the existence of investigations on specific firms, agency spokesman Dennis Holden said. He did say the agency has been working to warn potential investors about the dangers of foreign currency futures trading, or "forex," in general.
I hate to say I told you so, but, I told you so. Nations LLC has posted on their website that they are officially bankrupt and that “it does not appear likely that there will be sufficient funds to pay all claims of creditors and customers in full.” This is precisely what I have been warning about. When you trade with a poorly capitalized firm you are at much greater risk of losing your money because in the forex industry poorly capitalized firms have a terrible track record (this year alone over a dozen have gone out of business.) This is precisely why the NFA has raised capital requirements to $5 million. And as with One World Capital I put out a warning on Nations well before they started taking customer funds hostage.
Here is what I said on July 19, 2007:
Quote:
“The order holds Labell and WWF (Worldwide Forex) jointly and severally liable to pay WWF's customers restitution in the following amounts: WWF $3.1 million and Labell $1.5 million. The order also imposes civil monetary penalties of $126,000 against Labell and $3.1 million against WWF. Finally, the order permanently prohibits defendants from engaging, directly or indirectly, in any commodity-related activity.”
End of story right? Not in the domestic retail forex industry where the shysters rise from the grave like the flesh eating zombies from 28 days later. Nope, what really makes this story juicy is the fact that refugees from Worldwide apparently migrated over to another firm, a dead forex firm walking, by the name of Nations Investments LLC. ($1,699,000 in net capital).
In fact, Nations even has the same address as did Worldwide!
1700 NW 64TH ST. SUITE 100
FT. LAUDERDALE, FL 33309
Anyone want to make odds on how long it will be before Nations gets shuttered? Perhaps the folks over at Intrade can add a dead forex firms expiration date contract to their prediction market. If so, I’m going long on Nations going under. And I ain’t worried about a margin call…
Then on July 24, 2007 the NFA closed Nations:
Quote:
So what happened at Nations? Why was the NFA forced to take an "emergency Action" and shut them down? Well, because it was basically one of the industry's worst nightmares come true. An undercapitalized firm suffered massive losses and was forced to cover them with customer funds. Here is what the emergency action states:
"On Saturday, July 21, 2007, Nations sent to NFA, via e-mail, notice that it had fallen under the minimum required adjusted net capital."
On Monday, July 23, 2007, NFA sent a letter to Nations notifying the firm that as it was unable to demonstrate compliance with the minimum requirements Nations was to cease doing business. That same day, NFA received another notice from Nations representing that the firm had fallen under the required minimum "due to losses in the forex markets." This letter also indicated that Nations was attempting to raise $5 million "to make customers whole." (YIKES! "make customers whole?!" Who on Earth is going to give Nations $5 million?! While nations has been successful at making a fool of their customers they certainly won't be making them whole.)
Nations also provided NFA with a Form 1-FR as of July 20, 2007, which indicates that Nations owes customers trading in on-exchange futures more than $3 million and customers trading Forex more than $5 million. (Wow. What an implosion. They are $8 million in the hole? What the hell were they doing over there going to Vegas and playing craps with customer funds?)
This looks like another messy court case. With financials like this I expect the creditors will be coming out of the woodwork laying claim to what's left of Nations. If they're lucky they might be able to seize a fax machine or two, but as for customer funds, well, looks like some stripper in Vegas got her hands on that money first...
On September 6, 2007 the CFTC then Dropped the Hammer on Nations:
Quote:
In July I put out an alert to the FX Community about Dead Pool Member Nations Investments, LLC. Well, shortly there after the NFA went in and closed them down. Now it appears the CFTC has stepped in to collect their pound of flesh. Nations was hauled into court by the scruff of their neck by the Feds and a court receiver has now taken over the defunct firm. Have customers lost money? I'll keep everyone informed.
U.S. Commodity Futures Trading Commission Files Action Against Futures Commission Merchant Nations Investments, LLC, for Failure to Maintain the Minimum Amount of Net Capital Required by Federal Law
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) announced today the filing of a complaint in the U.S. District Court for the Southern District of Florida against Nations Investments, LLC (Nations) of Fort Lauderdale, Florida, a futures commission merchant (FCM) registered with the CFTC.
The complaint alleges violations of the minimum net capital requirements of the Commodity Exchange Act and Commission regulations. More specifically, according to the CFTC complaint, as of July 21, 2007, and perhaps earlier, Nations’ net capitalization was below the adjusted net capital required by the Act and a Commission regulation. As of July 20, 2007, the complaint charges, Nations’ adjusted net capitalization remained below the required adjusted net capital with Nations’ total liabilities equaling $5 million while its assets were less than $2 million.
Notice to Customers and Creditors of Nations Investments, LLC
On July 24, 2007, the National Futures Association ('NFA') issued a Member Responsibility Action against Nations Investments, LLC ('Nations' or the 'Company'), which among other things, directed the Company to close all open positions of forex account customers by July 25, 2007 at 5:00 p.m. (EDT). At the same time, the NFA authorized the bulk transfer by the Company of all the accounts of its on-exchange customers to Open E Cry, LLC, another Futures Commission Merchant. Accordingly, this Notice (and the administration of the receivership) is primarily for the benefit of the former Nations forex customers. (Former Nations on-exchange commodities account customers may contact Emily Stephens concerning their account at Open E Cry, LLC, telephone: (800) 920-5808.)
On July 30, 2007, the Commodity Futures Trading Commission ('CFTC') filed a Complaint against Nations in the United States District Court for the Southern District of Florida (the 'Court'). On August 7, 2007, the Court entered an Order pursuant to which the Court appointed Bruce H. Matson as Receiver for the Company and its assets. A copy of the Order can be viewed on this website.
The Receiver currently is attempting to determine the extent of the customer account balances and the other liabilities of the Company. He has taken possession and control of the assets and records of the Company. The Receiver also is attempting to identify what additional assets may be available to make payment to customers and creditors. The goal of this process is to (i) identify accurately all of the unpaid account balances of the Company's customers as of July 25, 2007, (ii) identify all other creditor claims, (iii) identify and collect any and all assets of the Company (including the possibility of asset recovery actions against third parties), (iv) distribute monies recovered pro rata to customers and creditors; and (v) provide the Court with a final accounting of the Receiver's activities. The Receiver is making every effort to seek cost efficient avenues to recover assets for the receivership and complete the claims process. The claims process, however, requires the identification of customers (and other creditors) and a determination of the validity and amount of their claims. This process is likely to take a number of months. If appropriate the Receiver will consider making an interim distribution to customers and other creditors. Customers also should be advised that, at the present time, it does not appear likely that there will be sufficient funds to pay all claims of creditors and customers in full. The CFTC complaint states that there are in excess of $5 million of customer liabilities and less than $2 million of cash assets remaining. Although it is much too early to predict, the recovery for customers may well be less than fifty percent (50%) of account balances as of July 25, 2007.
The Court directed the Receiver to file a report sixty (60) days from entry of the Order, the first to be filed by October 8, 2007. At that time, the Receiver will provide access to that report on this website. Finally, customers and creditors should refer back to this website from time to time for any updates.
Specific inquiries should be directed to the Receiver, Bruce H. Matson at LeClair Ryan at (804) 343-4090 or to Katherine M. Mueller at (804) 916-7117.
Real people have lost real money, not because they took trading losses but because they invested their money in a firm that was poorly capitalized. Don’t make the same mistake they did. Don’t trade with a poorly capitalized firm.
At last the customers of RefcoFX are getting their money back. Reports coming in over the wires indicate that customers are getting back roughly 40 cents on the dollar of their original investment. While that's still a very heavy loss to take at least the customers are getting something after two years of watching creditors loot their accounts. Phil Bennett and the rest of the board at Refco should know that there are some rather toasty seats in hell waiting for them upon their arrival.
The end of the RefcoFX nightmare brings with it a clear lesson to always trade with a regulated firm. If a firm isn't licensed, then stay away from it. Far, far away from it. And also be sure the firm you are trading with is well capitalized. The case of Nations, which was an undercapitalized broker on the dead pool is further evidence of that. And sadly enough, now Nations begins the journey that RefcoFX just ended.
The President of the National Futures Association, Dan Roth, dropped a 50 megaton bomb on the forex industry yesterday. In testimony before the Congress the NFA CEO requested that the Government increase capital requirements to TWENTY MILLION DOLLARS.
The second trait that marks the problem firms in retail forex is that most, though not all, have been thinly capitalized. Congress long ago recognized that acting as a dealer involves greater risk than acting as an agent in futures trading, the way a traditional FCM does. That is why Congress in 1978 imposed a $5 million net worth requirement for firms granting dealer options and why the CFTC created a $2.5 million capital requirement for leverage transaction merchants in 1984. Congress should amend Section 2(c) of the Act to require FCMs acting as counterparties to retail forex transactions to maintain minimum capital of at least $20 million. NFA has raised the capital requirements for forex dealers several times but this congressional action could ensure that firms can meet their obligations to their customers and have a significant financial stake in their business.
Wow. If you thought it would be hard for poorly capitalized firms to raise a couple million dollars just wait until they have to raise $20 million. There is simply no way most of these little firms are going to be able to do that. In fact, medium sized firms are going to be hard pressed to do that.
It is starting to become crystal clear that the only firms that are going to survive the coming NFA purge are the biggest, most well capitalized firms in the business. That is why Oanda went out and got $100 million in funding and Interbank got $30 million. The serious industry players know what's going on. So should the trading public. If ever there were a time to beware investing in poorly capitalized firms now is the time.
After all, if the NFA has no confidence in the stability of "thinly capitalized" firms why should the trading public?
At last the customers of RefcoFX are getting their money back. Reports coming in over the wires indicate that customers are getting back roughly 40 cents on the dollar of their original investment. While that's still a very heavy loss to take at least the customers are getting something after two years of watching creditors loot their accounts. Phil Bennett and the rest of the board at Refco should know that there are some rather toasty seats in hell waiting for them upon their arrival.
The end of the RefcoFX nightmare brings with it a clear lesson to always trade with a regulated firm. If a firm isn't licensed, then stay away from it. Far, far away from it. And also be sure the firm you are trading with is well capitalized. The case of Nations, which was an undercapitalized broker on the dead pool is further evidence of that. And sadly enough, now Nations begins the journey that RefcoFX just ended.
Re: Proposed NFA capital requirements
Hybrid Mode
