If your FX broker goes under, you'll have to wait until bankruptcy settlement!

crgarcia · Mar 5, 2008

Your FX funds are considered broker assets, and as such are subject to liquidation when the bankruptcy process ends.

So in short, you'll have to wait months or years, pay lawyers with your own pocket, and finally receive just a fraction of your account value.

Only fools invest in retail spot forex.

forex-forex · Mar 5, 2008

Quote from crgarcia:

Your FX funds are considered broker assets, and as such are subject to liquidation when the bankruptcy process ends.

So in short, you'll have to wait months or years, pay lawyers with your own pocket, and finally receive just a fraction of your account value.

Only fools invest in retail spot forex.

So far there has only been one incident of this happening and that was RefcoFX. I'm sure the major brokers such as FXCM and Gain Capital are safe.

cstfx · Mar 5, 2008

Quote from crgarcia:

Your FX funds are considered broker assets, and as such are subject to liquidation when the bankruptcy process ends.

So in short, you'll have to wait months or years, pay lawyers with your own pocket, and finally receive just a fraction of your account value.

Only fools invest in retail spot forex.

You're just getting this now?

Trader KGB · Mar 5, 2008

Segregated bank account = sleepin' peacefully.

Jayford · Mar 6, 2008

Took two years for me to just get a portion of my funds back when my futures broker went under.

BTW, they stated that funds were segregated, but they lied. When opening an account, especially with an IB (introducing broker), make sure the check you write is to a bank, and not the broker. Otherwise, odds are its not segregated.

Jay

DataCruncher · Mar 6, 2008

Jayford, I'm curious, which futures broker of yours went under?

cabletrader · Mar 6, 2008

Quote from crgarcia:

Your FX funds are considered broker assets, and as such are subject to liquidation when the bankruptcy process ends.

So in short, you'll have to wait months or years, pay lawyers with your own pocket, and finally receive just a fraction of your account value.

Only fools invest in retail spot forex.

More misinformation from the clueless

It depends which regulatory authority the broker comes under.

Also, no-one 'invests' in the retail spot forex market, they speculate.

scexglobal · Mar 6, 2008

Go with a broker that allows a bank guaratee. This way, only 20% of your funds are kept with the broker.

ssss · Mar 6, 2008

Quote from scexglobal:

Go with a broker that allows a bank guaratee. This way, only 20% of your funds are kept with the broker.

SEC ,SIPC and Loydsbank insurance are better as CFTC

In ET was one trader from France ,which stated ,that after years received some until 50% of he's fundsfrom Refco ,which
was public noted(!) andmore as FXCM

crgarcia · Mar 6, 2008

Quote from Trader KGB:

Segregated bank account = sleepin' peacefully.

Quote from Jayford:

Took two years for me to just get a portion of my funds back when my futures broker went under.

BTW, they stated that funds were segregated, but they lied. When opening an account, especially with an IB (introducing broker), make sure the check you write is to a bank, and not the broker. Otherwise, odds are its not segregated.

Jay

Even if they really have segregated accounts, it just doesn't matter.

Segregated accounts have NO legal validity, and segregated accounts are considered part of the broker money, not the customer, in a bankruptcy.

The NFA has a clear warning on this.