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Euro Money Comments on the Capital Requirement Euro Money has just published an article on the rule proposal that backs up everything I have been saying. Furthermore we are now seeing a lot of other Industry players offering their comments. Here are some choice quotes from some industry...

For the Critics I have received some complaints from other forum users that my "Dead Forex Firms Walking Dead Pool" amounts to nothing more than scare tactics since the rule hasn't passed and since no one is yet required to meet the proposed $5 million capital requirement. In short, these...

Corrections First, the link for the Udo Scuba Rogues is incorrect. This is the correct link: http://www3.sympatico.ca/johnfrancis/rogues.htm Second, I made some incorrect statements regarding Trend Commodities Limited...

Meanwhile, back at the Dead Pool. The NFA appears to be wrapping up the closures of CFG and UGMFX. They released the following two press releases today regarding the regulatory actions they took against said firms. Once again both firms were very poorly capitalized and were not able to keep...

Underwater Udo The word "Bucket Shop" gets thrown around a lot in the retail forex business. But what exactly is a bucket shop? www.traderslog.com describes a Bucket Shop as follows: Describes a brokerage facility that books (takes the opposite side of) retail customer orders without...

Right now the Regulators are focused on the capital requirement issue. It isn't that the things you pointed out aren't important, they are. But with all these firms going out of business the NFA and CFTC are focused on flushing the bottom feeders out of the industry for the time being.

The New CFTC numbers came out last week: http://www.cftc.gov/files/tm/fcm/tmfcmdata0706.pdf As a result it is time for another Dead Pool Update: Poorly Capitalized Firms Advanced Markets ($1,039,000) American National Trading Corp ($2,159,000) Bacera Corporation (Shutdown!) Cal...

There is this myth going around that NDD firms have no risk because they are "not market makers." It's time to put this myth to rest once and for all. First, all firms, whether they have dealing desks or not, are required to set aside 10% of all customer assets if they offer 100 to 1...

Velocity has not been granted a pardon. They are listed under the name Hamilton Williams

Lessons from the Collapse of CFG Why does the NFA want to raise capital requirements? Precisely because of firms like CFG. Of course, many of the fraudsters will be driven out of the business which is certainly a good thing and one of the reasons for the NFA to take action. But there will...

The Collapse of CFG In January of 2007 CFTC reports showed that CFG Trader had $1,790,000 in Adjusted Net Capital. That means they were $800,000 over their required amount. So for the average trader checking in on CFG everything looked good right? Suppose you also checked the NFA website...

The Case of CFG I have spent a lot of time discussing the issue of forex fraud and how this has been one of the motivating factors driving the regulators' desire to raise capital requirements. But the issue of broker dealer insolvency is in many respects more pressing. The failure rate for...

Breaking News: Both the National Futures Association and the CFTC have apparently de-listed Performance Capital International Inc. The NFA says on its website their membership was withdrawn on July 26, 2007. The most recent CFTC report also shows Performance as a member of its "deletions"...

Page 42 of the current issue of Currency Trader Magazine (Free Subscription) has an article about the new NFA proposal. It reports on exactly what I have been saying these last few weeks. (www.currencytradermag.com) Here are some key quotes from the article: “The NFA wants to raise...

As of August 2, 2007, this is where we stand in regards to the NFA proposal to raise capital requirements to $5 million: FX Week states, "Following redrafting to include industry feedback, the proposals will be presented to the NFA board in August and then to the CFTC, and are not expected to...

The FX Week article states, "Following redrafting to include industry feedback, the proposals will be presented to the NFA board in August and then to the CFTC, and are not expected to be effective until the end of the year, the NFA explained." So basically that gives the dead forex firms...

It's been close to two months since I started reporting on Dead Forex Firms Walking. Since my first post much has changed and the list is in need of an update. So here it is, Introducing: NFA Dead Forex Firms Walking, version 2.0: (Adjusted Net Capital as of May, 2007, direct from the CFTC...

Looks like the media is starting to pick up on the undercapitalization story. Both FX Week and Euromoney did recent stories on what I have been saying for several weeks now: Proposed NFA rules seen as catalyst for consolidation in US retail http://www.euromoneyfix.com/ US regulators clamp...

What about Refco? This is a common refrain I have been hearing from critics of the NFA Forex Dealer Dead Pool. Refco was massive and they went under in record time which proves that being adequately capitalized doesn't matter right? Wrong. While citing Refco is a good sound byte it in no way...

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...