Ask people who are already using that broker, check social media reviews, go through their regulation certification, start initially with a small capital.
How do you identify a scam broker?
- Thread starter SmithFX
- Start date
But I know some others and they have been using the same name for years. Is there any other way to identify a scam broker? How can I check their regulation?
There can be various red flags, but I would personally pay attention to regulation (check their license in the official register), check which payment methods they accept, also quality of their website, personal cabinet, their linkedin page, reviews from traders and employees as well. It is hard for a scam broker to take care of this all.
I was not familiar with the Niederhoffer affair. Fascinating story you found at The Washington Post.
I have just begun reading Taleb's Fooled by Randomness. I have only read the introduction. But Niederhoffer's comments already sound ridiculous:
Sounding dazed and speaking in a barely audible voice, he said last week that he was a victim of circumstances he could not have been foreseen.
"I've made that trade hundreds of times in the past 15 years," he whispered. "I believe it's a good trade. It was a one in 2,000 shot that the market would decline like that."
His suit was filed 1999. That was in the days before the internet, at least before the internet as we know it. Without access to a paid resource like WestLaw or Lexis-Nexis, it may be impossible to find any concrete data about the case.
But I did find this, in a very superficial Google search:
https://www.sec.gov/Archives/edgar/data/1103945/000091205701539313/a2063189z10-q.htm
It's a Form 10-Q filed with the SEC by the Chicago Mercantile Exchange, Inc.
The report says:
In May 1999, Victor Niederhoffer, Niederhoffer Investments, Inc. and several commodities pools controlled by Victor Niederhoffer filed a complaint against CME and a number of unidentified employees, officials and members under the Commodity Exchange Act in the United States District Court for the Northern District of Illinois. The complaint charges that CME failed to enforce its rules relating to the establishment of settlement prices on specified dates and that as a consequence, Niederhoffer, the pools and their futures commission merchant suffered damages of at least $105 million. CME has reached a tentative agreement with plaintiffs and a reserve has been established in the third quarter of 2001, with a final settlement anticipated in the fourth quarter of 2001.
So, you gotta draw your own conclusions. Those kinds of settlement agreements always contain a paragraph that says that the defendants do not admit any wrongdoing, and that the decision to settle the case was based on a desire to avoid the expense of protracted litigation.
But some would say that they would not have settled if the case had absolutely no merit whatsoever, and that the decision to settle that kind of case, in reality, is at least partially based on the risk that they might lose if take it to trial.
With that being said, it is also true that sometimes, if a case is very weak but not meaningless, the defendant may be almost certain that they can win the case at trial, but it may still be less expensive to settle the case than to go to trial because of the cost of litigation.
I found this insightful article on identifying forex broker scams. Kindly check it out, hope it helps!
https://insights.primecodex.com/forex-broker-scams/
https://insights.primecodex.com/forex-broker-scams/
If he were to "stay with a regulated broker", he would not have a need to identify a scam broker to avoid.
I don't think you are well-adapted to understanding forum threads?
Verifying the legitimacy of a forex broker is a crucial step to ensure the safety of your funds and the reliability of the trading platform. You can learn about the steps you can take to check if your forex broker is legit here:https://insights.primecodex.com/forex-broker-scams
Scam brokers are popularly known as scammers and they don’t have any regulation certification.