Prop firm wants me to wire to offshore account. Business as normal or suspect?

G

gianfrancoB

Hi,

I'm going to be putting money to prop trade in a firm in Miami. I've been working at the office trading with a demo account for 6-8 weeks. Now is the time for me to start actual trading. Issue is I have to wire money To offshore account. I'm putting $10-15k. I've done research with this firm and they seem reputable. But one never really knows.

I was told by the firm that due to compliance the hedge fund is based off shores, so I have to transfer there, then the money is transferred back to the New York office.

I'm not licensed yet. But I was told by others I can trade under hedge fund model.

Is this normal? Any experience or input would be great.

Thanks
 
This sounds VERY shaddy! I find it hard to believe that this is a licensed BD that is asking you to to that. If it is not a licensed BD then it is most likely not a legal structure. What is the name of the "hedge fund"?
 
I think you are being scammed. There is only one legal way to trade prop if you live in the US and are making a deposit. And that is to be licensed and trade with an SEC registered broker dealer. An example would be Bright Trading or WTS (JC Trading Group)

If this is a hedge fund and you are wiring money offshore I would have SO many questions for them. To start:

1. Where is the hedge fund registered? Can I see all the proper registration documentation.
2. If I am making a deposit into the find am I am investor into it? Do I have to be accredited?
3. If I am a trader for the fund why are you asking me for money? Are you hiring me? How am I getting paid? Is this the 2/20 model?
4. Where is my money being held?
5. Why am I wiring overseas?
6. Are you marking up my trades?...only broker dealers can do that.
7. Do you have an opinion letter from an attorney that says you don't need to be registered?


I can go on and on. I would start asking these questions and if you don't get well documented answers I would run.....not walk.....RUN!

Maybe post the name of the firm here as well as the answers they give you and we can help you sort the answers out.
 
gianfrancoB said:
Hi,

I'm going to be putting money to prop trade in a firm in Miami. I've been working at the office trading with a demo account for 6-8 weeks. Now is the time for me to start actual trading. Issue is I have to wire money To offshore account. I'm putting $10-15k. I've done research with this firm and they seem reputable. But one never really knows.

I was told by the firm that due to compliance the hedge fund is based off shores, so I have to transfer there, then the money is transferred back to the New York office.

I'm not licensed yet. But I was told by others I can trade under hedge fund model.

Is this normal? Any experience or input would be great.

Thanks
More...

"I've been working at the office..."

What have others who are working at the office done? Did they wire money offshore? Are they all trading demo accounts?

"I've done research with this firm and they seem reputable. But one never really knows."

What research? What convinced you they "seem reputable." Has anyone in the office taken a check? Have you seen the fund's corporate structure or their financials?

"I was told due to compliance..."

Again, you'll need to find out how exactly the firm is structured. Why are you making a deposit? If you're trading at a hedge fund, then the fund itself has capital, and you are simply an employee trading their capital, which is quite different than a prop shop that requires you to put up capital.

"I am not licensed yet, but I was told..."

What license are you referring to, a series 56, a series 65, a series 7? 56 is for prop shops, 65 is for investment adviser rep, but Florida doesn't require it for a hedge fund. So is it a 7? But that is for broker/dealers that have customer accounts.

"Is this normal?"

NO.
 
Why don't you name the firm? Maybe someone can help. Don't worry about defamation, it's only defamation if it's not true.
 
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