My response to the question of FXCM being referenced in the above complaint
The FXCM referred to in this complaint against James de Wet is the same as Forex Capital Markets LLC the entity where clients open an account when they trade forex with my firm, not FXCM LLC which is a dormant FCM set up to potentially offer futures trading down the road. As you can also see in the upper right hand corner of the document posted, this complaint is filed against James de Wet and not FXCM.
Like most firms, FXCM gives clients the ability to assign limited power of attorney over their account to allow a third party to trade their account. As long as FXCM holds a limited power of attorney authorizing a trader to trade an account, which the account owner has signed, then the account is opened and the trader is allowed to trade the account. Once the account is opened both the trader and the client have access to real time statements on the account and the limited power of attorney can be revoked at any time by the account owner.
While FXCM vets and performs heavy testing on the managed accounts that we refer accounts to, if a client wishes to assign limited power of attorney over their account to someone that FXCM is not recommending to them, then we do not feel it is our responsibility to intervene in that process outside of the normal due diligence done when anyone opens an account. With this being said, we do have controls in place to try and alert clients who are potentially being defrauded to that fact (the strongest of which is real time reporting capability over the account which is given to the account holder so that he can view activity in real-time) and have shut accounts down in the past to avoid potential situations like the one listed in the above complaint.
So, long story short here, while it is unfortunate that this happened, it is my opinion that FXCM was not at fault here, and I feel that the fact that we were not named as a defendant in this case is further evidence of this.
My response to the question of FXCM offering "forex futures trading accounts"
There has been much debate among the regulators as to the definition of the spot forex market, which is what FXCM and firms like us offer traders access to. In the past, I would assume because of the two day settlement period that is characteristic of the spot foreign exchange market, the CFTC was referring to trading done off exchange as forex futures trading, as they have in the complaint referenced above document.
As you can see from the below link, they now refer to the spot fx market as leveraged off-exchange foreign currency contracts.
http://www.nfa.futures.org/news/newsNotice.asp?ArticleID=1781
The above definition is a more accurate definition in my opinion of what FXCM offers to clients today, it is the only product that we have ever offered, and it was the product that James de Wet was trading when the complaint you referenced was filed.
When I say currency futures, and I think most industry professionals will agree here, I am talking about currency trading that is done on an exchange like the CME, which as I stated in my last post, FXCM does not currently trade and has never offered to clients.
