Lake St Closing?

Yes, Lake Street has been shut down by the SEC. I have a friend who knows someone that trades there and he said they have been shut down. The writing was on the wall for these types of firms that are in the US and take US traders. See these threads:

http://www.elitetrader.com/vb/showthread.php?s=&postid=3428919&highlight=LAKE+and+street#post3428919

http://www.elitetrader.com/vb/showthread.php?s=&postid=3609654&highlight=LAKE+and+street#post3609654

Hopefully the account at the clearing firm hasn't been frozen. My advice: If you are in the US take the Series 56 and go with a regulated firm.
 
Yes! I warned everyone in this post (last post of page):

http://www.elitetrader.com/vb/showt...age=6&highlight=lake and street&pagenumber=13

"I hope I didn't imply they are crooks. I don't know them personally and have no knowledge if they have stolen anyone's money yet. I don't think they have criminal intent, but they are taking shortcuts by not registering as a broker dealer. It is highly probable that the SEC will shut them down and have all their accounts frozen. Especially since traders have complained to the SEC about them already. They are on the radar. When this happens traders will get little if any of their money back. I have warned traders about other non registered firms in the past and they have been shut down."

I warned everyone about Ephipany and Paramount as well in this thread and they were shut down as well:

http://www.elitetrader.com/vb/showthread.php?s=&postid=3498769#post3498769

I would be surprised if Cy Group is next.
 
Former Lake Street traders:

Please feel free to contact us about trading with a licensed broker dealer. We can get you sponsored for the Series 56, supply study material, as well as offering a live, online review course every month. Please feel free to call us at 248.406.3250 or fill out the Contact Us form at http://www.jctradinggroup.com/contact.php .

Thank You,

JC Trading Group
 
Had a call yesterday from a trader at Lake Street; yes they have been shut down by the SEC. I believe Broad Street Trading has been as well. YOU MUST be registered to receive professional leverage; doesn't matter that these firms open bank accounts overseas...it is 100% illegal.
 
According to what I've researched and read, it's not illegal for the trader. It is illegal for US residents to be working for an international firm without a work permit for the country the firm is registered in. The problem with Lake Street and Broad Street is that these were US firms operating out of the US with US bank accounts. They were registered and then forfeited their CBSX broker-dealer license. Not sure what the hell has happened since then but it seems like they went on operating as usual without the license after forfeiting it. It was only a matter of time before they got shut down. The same goes for other international firms operating in the US.

Unless the international group you are looking to join is registered in their home country with or as a broker-dealer, I would steer clear. Bahamas or European oversight isn't as extensive as the US, but it's still oversight. The last thing you want to do is join some firm out in Guatemala that has no oversight and is registered with nobody.

From my understanding, it is legal for you to join them as long as your trading is not breaking any laws. What is illegal is for a US resident or firm to provide access to US traders without a license.

Then again, I could be wrong. it wouldn't be the first time.

I work with the assumption that any of these firms can shut down overnight. Even regulated US firms like MF Global, or in this case, Broad St. can have devastating impacts to their business based on many different variables. The honest truth of the matter is your $$ is never going to be safe with a place that is leveraging it 20x. There is tons of risk on these firms' ends and that's something traders need to accept before forking over the cash. Getting some series 56 or 7 license is not going to protect you from corporate insolvency. Just look at the situation in Cyprus. Anyone of us can get screwed tomorrow and lose whatever we have in these firms. It's a risk I've learned is inherent and unavoidable. The heavy regulations haven't changed that. In fact, it's added onto the costs of doing business and made the industry less competitive and more unstable if anything. Either way, the conditions for doing business as a prop-trader just keep getting harder and harder with no real end in sight.

Quote from go hokies:

Had a call yesterday from a trader at Lake Street; yes they have been shut down by the SEC. I believe Broad Street Trading has been as well. YOU MUST be registered to receive professional leverage; doesn't matter that these firms open bank accounts overseas...it is 100% illegal.
More...
 
Quote from go hokies:

Had a call yesterday from a trader at Lake Street; yes they have been shut down by the SEC. I believe Broad Street Trading has been as well. YOU MUST be registered to receive professional leverage; doesn't matter that these firms open bank accounts overseas...it is 100% illegal.
More...

Hokies,

It is not 100% illegal. Just grey. A firm has to register as a BD in the US if they solicit business in US, has an office in US, and owned by a US citizen. There are a few other grey areas such as accepting deposits and marking up trades but firms can word agreements in such a way as to mask these.

The problem with Lake Street and Broad Street is they were located in the US and openly solicited US traders. Banking has nothing to do with anything.

There are a few "international firms" out there and I am not going to name them so as to not be accused of shilling. There is still a lot of risk going with these firms, so make sure they have:

1. No office/phone in US
2. No solicit US traders
3. No US owners
4. No banking in US
5. Good reputation. Check Elitetrader for signs of trouble. Reading over various threads, there were early signs that Lake Street was a problem.

Lastly, you can save yourself a lot of trouble and trade in a structure that is accepted by the SEC, such as a CBSX or Philly BD, a firm like Bank of NY, or a hedge fund model.
 
I disagree with you after speaking to a Representative with the SEC. You CANNOT receive more then 2 to 1 leverage on a capital deposit of $5000 UNLESS you are registered...it is that simple! These firms like Lake Street take small capital deposits and give you 10 to 1 leverage and then tell you it's legal because their main dealer (BSI: Broad Street International) is an international company....BS!!! The SEC wants these companies out of business.

To be structured like a Hedge Fund; you CANNOT receive Capital deposits, MUST have profit sharing and CANNOT 'MARKUP' commissions.

Bottom line; if you want leverage, then you need to be registered and play with a registered FINRA firm.
 
Overall, we are on the same page. If you want to trade you should be in a structure that is generally accepted by the SEC.

However, the whole idea of foreign BDs is grey. Please refer to this link:

http://www.sec.gov/divisions/marketreg/bdguide.htm#II

And look for the section: 6. Foreign Broker-Dealer Exemption (Rule 15a-6)




Quote from go hokies:

I disagree with you after speaking to a Representative with the SEC. You CANNOT receive more then 2 to 1 leverage on a capital deposit of $5000 UNLESS you are registered...it is that simple! These firms like Lake Street take small capital deposits and give you 10 to 1 leverage and then tell you it's legal because their main dealer (BSI: Broad Street International) is an international company....BS!!! The SEC wants these companies out of business.

To be structured like a Hedge Fund; you CANNOT receive Capital deposits, MUST have profit sharing and CANNOT 'MARKUP' commissions.

Bottom line; if you want leverage, then you need to be registered and play with a registered FINRA firm.
More...
 
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