I just realized that my post above may have been construed as a 'playing along' with forexsavior. Lest I am accused of likewise being a shill for a big forex firm, in the interests of full disclosure I should say that I trade with IB. I am pretty interested in what occurs to the smaller shops, though, as I've looked around for alternatives to IB's IDEALPRO forex offering.
Proposed NFA Capital Requirement
- Thread starter forexsavior
- Start date
As a by-stander following this thread hoping to get me more insight of this industry (BTW I was a long time trader even before any one of these companies in business). I kind of agree with KVincent that I will not follow this thread anymore. > ForexSavior came out with something seemed solid and had come to a point he is just too obvious working for the interest of one and only one FIRM. I like to see him keep on with this thread but just recommend all traders to move funds to any of the big guys BUT NOT THE FIRM he works on.
One more query, don't you guys reading this thread notice that ForexSavior seems to have alot of insider information that normal person could get in such a good details?
Candyman I have never made a post soliciting customers to trade at any one firm. My advice has always been to conduct your due diligence and simply trade with a well capitalized firm. And there are many to choose from.
Shouldn't they also avoid "well capitalized" brokers who have been charged with, according to the NFA website ...
⢠C.R.2-36(b)(1) - CHEAT, DEFRAUD, DECEIVE FOREX CUSTOMERS??
(http://www.nfa.futures.org/BasicNet...spx?seqnum=1023)
http://www.nfa.futures.org/BasicNet...046&contrib=NFA
Currency Brokers in Crisis I
In the last few weeks I have reported on two poorly capitalized/unregulated forex broker dealers who are currently holding customer funds hostage. Well, both firms appear to be in complete chaos judging from whatâs going around on various bulletin boards.
Weâll start with NFA regulated One World Capital. Their troubles started earlier this year when the NFA inspected their books and discovered they were not meeting their financial requirements. The NFA said at the time, âOne World lacked an understanding of, or was inattentive to, regulatory requirements and was ill prepared to accept customer business as either an FDM or an FCM. The firm had not established adequate systems to enable it to handle customer funds or comply with customer reporting requirements."
http://www.nfa.futures.org/basicnet/...17&contrib=NFA
Since then One World has been losing staff and appears to be experiencing a severe cash crunch which has resulted in the halting of customer withdrawals, as detailed here:
http://www.goldenmoneytree.com/forum/viewtopic.php?t=692&postdays=0&postorder=asc&start=100
Since then my Inbox has been piling up with emails from distraught One World Customers and now a report has come out at Forex Factory that One World is revoking a whole series of rollover interest payments on GBP/JPY trades as well:
http://www.forexfactory.com/showthread.php?p=1576700#post1576700
It came to my attention that 1World has resorted to dirty tactics in withholding profits/money from clients.
Sometime ago, 1World gave $40 or so per day in Swaps for LONG GBPJPY. Traders who made money on this have their profits and money withheld (indefinitely?). I also noticed about 6 weeks ago that swap rate for GBPCHF was zero for both long and short. This was already reported at StrategyBuilderFX forum. Was these swap rate an error or a deliberate Trap? After reading the horror stories, I suspect its a trap meant to screw traders.
How does this become a dirty ploy?
Assume you traded GBPJPY, made money in the process with 1World. Later they come to you saying, "Hey Mr Trader, you made money from a wrong swap rates and we are disqualifying them all". This includes the swaps you collected as well as the PIPS you made and to include ALL OTHER TRADES made after these trades; if these GBPJPY trades were not made, you wont have money to make further trades.". Remember, GBPJPY was soaring in June/July and these traders made money from it by going Long GBPJPY..
There are two possibilities being played here:
1. 1World did not hedge your trades with an upper tier broker (1World traded vs you); you made money and they now rescind those trades.
2. 1World hedged your trades with an upper tier broker. However, 1world now claims YOUR profits.
You dont earn swaps. you dont earn Pips. End of Story.
The trap is for traders to make positions on those pairs; if you did and after further trading (even with other pairs) made money, they will go to your account and "cancel" your profits claiming, these could not take place so there is no profit made.
In the last few weeks I have reported on two poorly capitalized/unregulated forex broker dealers who are currently holding customer funds hostage. Well, both firms appear to be in complete chaos judging from whatâs going around on various bulletin boards.
Weâll start with NFA regulated One World Capital. Their troubles started earlier this year when the NFA inspected their books and discovered they were not meeting their financial requirements. The NFA said at the time, âOne World lacked an understanding of, or was inattentive to, regulatory requirements and was ill prepared to accept customer business as either an FDM or an FCM. The firm had not established adequate systems to enable it to handle customer funds or comply with customer reporting requirements."
http://www.nfa.futures.org/basicnet/...17&contrib=NFA
Since then One World has been losing staff and appears to be experiencing a severe cash crunch which has resulted in the halting of customer withdrawals, as detailed here:
http://www.goldenmoneytree.com/forum/viewtopic.php?t=692&postdays=0&postorder=asc&start=100
Since then my Inbox has been piling up with emails from distraught One World Customers and now a report has come out at Forex Factory that One World is revoking a whole series of rollover interest payments on GBP/JPY trades as well:
http://www.forexfactory.com/showthread.php?p=1576700#post1576700
It came to my attention that 1World has resorted to dirty tactics in withholding profits/money from clients.
Sometime ago, 1World gave $40 or so per day in Swaps for LONG GBPJPY. Traders who made money on this have their profits and money withheld (indefinitely?). I also noticed about 6 weeks ago that swap rate for GBPCHF was zero for both long and short. This was already reported at StrategyBuilderFX forum. Was these swap rate an error or a deliberate Trap? After reading the horror stories, I suspect its a trap meant to screw traders.
How does this become a dirty ploy?
Assume you traded GBPJPY, made money in the process with 1World. Later they come to you saying, "Hey Mr Trader, you made money from a wrong swap rates and we are disqualifying them all". This includes the swaps you collected as well as the PIPS you made and to include ALL OTHER TRADES made after these trades; if these GBPJPY trades were not made, you wont have money to make further trades.". Remember, GBPJPY was soaring in June/July and these traders made money from it by going Long GBPJPY..
There are two possibilities being played here:
1. 1World did not hedge your trades with an upper tier broker (1World traded vs you); you made money and they now rescind those trades.
2. 1World hedged your trades with an upper tier broker. However, 1world now claims YOUR profits.
You dont earn swaps. you dont earn Pips. End of Story.
The trap is for traders to make positions on those pairs; if you did and after further trading (even with other pairs) made money, they will go to your account and "cancel" your profits claiming, these could not take place so there is no profit made.
Currency Brokers in Crisis II
Meanwhile, in Switzerlandâ¦
Tradex Swiss Ag is still at war with itself apparently. The SFBC is fighting with the Tradex office in Boston over who has the right to talk to the customers of Tradex Swiss AG. Meanwhile the customers, who just want their money back, have no choice but to watch this farce from the sidelines. I have posted the two dueling press releases below. UN-BELIEVALBLE:
From: Craig Karlis
Service address: 100 Franklin Street
Boston
Massachusetts
02110
To: All clients of Tradex Swiss AG
Date: 29 August 2007
Dear Clients
Re: "Hostile take-over" of Tradex Swiss AG (Boston office)
As most of you may be aware by now, Tradex Swiss AG is currently being investigated by the Swiss Federal Banking Commission (SFBC). This is not a criminal investigation but was ordered to determine whether Tradex Swiss AG needs a banking license in Switzerland to operate their business and structured products (please see the attached documents from the investigating trustees from Switzerland).
As a precautionary measure, your funds in the Bank of America account of Tradex were frozen on 3 July 2007, by the Swiss authorities in an effort to protect your interests. If protecting your money constitutes a "hostile take-over" as described in the e-mail from the Swiss Management, headed by Mr Nic M Jansen van Rensburg before the Swiss authorities took control of the company, then we are guilty. Since the "freeze" of your money the former management of the Boston office has initiated a suit in a Massachusetts court and obtained an injunction to protect your money - resulting in an injunction that prevents your funds being moved to Switzerland, as well as preventing Bank of America from dispensing any funds without the knowledge of all the parties involved. All legal expenses are solely financed by the previous management of the Boston office while the management in Switzerland has not paid its employees or other operating expenses (infra-structure) of the Boston office since June.
There was no "hostile take-over" by anyone in Boston and there are absolutely no direct or indirect relationship between Tradex Swiss AG and Boston Trading and Research LLC. The Swiss trustees were the ones who originally froze the account. I and the rest of the Boston management took the actions in court solely because they refused to inform any one in Boston as to the status of the accounts, and in fact would not communicate with us in any way. We have taken steps at our expense, to protect your interests and resolve your inconvenience, by getting your funds released and wired to you without delay.
To satisfy yourself about the true facts of the situation, you may consider obtaining concrete evidence/proof of the following from the Swiss Management:
⢠their efforts since 5 July 2007 to secure and get your money released,
⢠their response to your withdrawal request;
⢠the identity of their traders participating in their "capital guaranteed program";
⢠the opinion of the Swiss Federal Banking Commissions and other regulatory bodies about any guarantee of client funds, especially if it pertains to spot forex transactions (part of why the investigation was sanctioned);
⢠payroll details for the Boston office employees for July and August;
From myself and the former management of the Boston office of Tradex we can assure you of one thing only: We are doing everything within our power and the law to secure your funds in Bank of America and make sure it gets wired directly to you in terms of the Anti-money laundering regulations as soon as unfortunate matter is resolved. We have the "disadvantage" that we all live in Boston and have to make a living here.
From the attached documents it is clear that the Swiss trustees, appointed by the SFBC, are currently in control of Tradex Swiss AG for the duration of their investigation. If you have any queries feel free to contact any of the Swiss trustees at http://www.lawyerlutz.ch/english/kontakt/index.html or call them at Tel +41 44 560 8080 or Fax +41 44 560 8090 or e-mail to Peter Lutz peter.lutz@lawyerlutz.ch ; Romeo Da Rugna romeo.darugna@lawyerlutz.ch ; Michael Bopp michael.bopp@lawyerlutz.ch .
Please accept our most sincere apology for the inconvenience cau sed by the continued transgressions of the SFBC prescriptions by the Swiss Management. In our opinion the best course of action would be to let the legal process, set in motion by myself and the Boston management, continue uninterrupted. I undertake to keep you up to date of any new developments or progress concerning our legal process against the Bank of America and Tradex Swiss AG.
Yours Sincerely
Craig Karlis
The SFBC responded in kind:
Memorandum
Mandate: SFBC / Tradex and Swiss Garant
Subject: Further information to clients of Tradex Swiss AG
to: Clients of Tradex Swiss AG / file
from: Dr Peter Lutz and Romeo Da Rugna
Date: 3 September 2007
Dear Madam, dear Sir,
we have informed earlier that the Swiss Federal Banking Commission (SFBC) has opened an investigation on Tradex Swiss AG ("Tradex"). The purpose of such investigation is to verify, whether the company has been conducting financial activities without the necessary homecountry licence. The SFBC terminated the signatory power of the former signatories of Tradex and appointed the undersigned Dr Peter Lutz and Romeo Da Rugna to carry out the investigation on behalf of the SFBC. The SFBC granted Dr Peter Lutz and Romeo Da Rugna the exclusive authority, with sole signatory power, to represent and act on behalf of Tradex.
Further to our former information we can give you the following update about the pending investigation: We are at the moment not in a position to complete our investigation since part of the management of Tradex refuses to cooperate with the undersigned and do not deliver requested information and documents in a complete and timely manner.
A part of the management of Tradex even filed a complaint against Tradex in Boston USA. Tradex therefore had to employ US counsel in order to defend this complaint which is seriously obstructing and delaying the pending investigation.
Without the complete information and documentation about all assets and liabilities of Tradex, we are not able to determine which clients and/or creditors have legitimate claims towards Tradex. Therefore, lacking this information and documentation, we can not find out, and we consequently can not exclude, whether there is any risk of preferential treatment of
creditors if now payments are made to individual clients and/or creditors.
Until we do not have a complete overview on all of Tradex' assets and liabilities, we are therefore not in a position to make any transfer to clients and/or creditors of Tradex.
We finally would like to inform that none of the messages which have been sent since 3 July 2007 by the management of Tradex have been authorised by the undersigned. Such messages and information therefore do not reflect the opinion of the undersigned. As soon as the investigation will be completed, you will receive further information.
Yours sincerely
DR PETER LUTZ AND ROMEO DA RUGNA
Investigators appointed by the Swiss Federal Banking Commission
If it is any consolation to the traders stuck in these two firms both the NFA and SFBC are making big changes to try and keep these kinds of things from happening again (NFA by raising capital requirements and SFBC by regulating forex in CHF.) As for everyone else, please conduct your due diligence and avoid poorly capitalized and/or unregulated firms for this is what can happen if you donât.
Meanwhile, in Switzerlandâ¦
Tradex Swiss Ag is still at war with itself apparently. The SFBC is fighting with the Tradex office in Boston over who has the right to talk to the customers of Tradex Swiss AG. Meanwhile the customers, who just want their money back, have no choice but to watch this farce from the sidelines. I have posted the two dueling press releases below. UN-BELIEVALBLE:
From: Craig Karlis
Service address: 100 Franklin Street
Boston
Massachusetts
02110
To: All clients of Tradex Swiss AG
Date: 29 August 2007
Dear Clients
Re: "Hostile take-over" of Tradex Swiss AG (Boston office)
As most of you may be aware by now, Tradex Swiss AG is currently being investigated by the Swiss Federal Banking Commission (SFBC). This is not a criminal investigation but was ordered to determine whether Tradex Swiss AG needs a banking license in Switzerland to operate their business and structured products (please see the attached documents from the investigating trustees from Switzerland).
As a precautionary measure, your funds in the Bank of America account of Tradex were frozen on 3 July 2007, by the Swiss authorities in an effort to protect your interests. If protecting your money constitutes a "hostile take-over" as described in the e-mail from the Swiss Management, headed by Mr Nic M Jansen van Rensburg before the Swiss authorities took control of the company, then we are guilty. Since the "freeze" of your money the former management of the Boston office has initiated a suit in a Massachusetts court and obtained an injunction to protect your money - resulting in an injunction that prevents your funds being moved to Switzerland, as well as preventing Bank of America from dispensing any funds without the knowledge of all the parties involved. All legal expenses are solely financed by the previous management of the Boston office while the management in Switzerland has not paid its employees or other operating expenses (infra-structure) of the Boston office since June.
There was no "hostile take-over" by anyone in Boston and there are absolutely no direct or indirect relationship between Tradex Swiss AG and Boston Trading and Research LLC. The Swiss trustees were the ones who originally froze the account. I and the rest of the Boston management took the actions in court solely because they refused to inform any one in Boston as to the status of the accounts, and in fact would not communicate with us in any way. We have taken steps at our expense, to protect your interests and resolve your inconvenience, by getting your funds released and wired to you without delay.
To satisfy yourself about the true facts of the situation, you may consider obtaining concrete evidence/proof of the following from the Swiss Management:
⢠their efforts since 5 July 2007 to secure and get your money released,
⢠their response to your withdrawal request;
⢠the identity of their traders participating in their "capital guaranteed program";
⢠the opinion of the Swiss Federal Banking Commissions and other regulatory bodies about any guarantee of client funds, especially if it pertains to spot forex transactions (part of why the investigation was sanctioned);
⢠payroll details for the Boston office employees for July and August;
From myself and the former management of the Boston office of Tradex we can assure you of one thing only: We are doing everything within our power and the law to secure your funds in Bank of America and make sure it gets wired directly to you in terms of the Anti-money laundering regulations as soon as unfortunate matter is resolved. We have the "disadvantage" that we all live in Boston and have to make a living here.
From the attached documents it is clear that the Swiss trustees, appointed by the SFBC, are currently in control of Tradex Swiss AG for the duration of their investigation. If you have any queries feel free to contact any of the Swiss trustees at http://www.lawyerlutz.ch/english/kontakt/index.html or call them at Tel +41 44 560 8080 or Fax +41 44 560 8090 or e-mail to Peter Lutz peter.lutz@lawyerlutz.ch ; Romeo Da Rugna romeo.darugna@lawyerlutz.ch ; Michael Bopp michael.bopp@lawyerlutz.ch .
Please accept our most sincere apology for the inconvenience cau sed by the continued transgressions of the SFBC prescriptions by the Swiss Management. In our opinion the best course of action would be to let the legal process, set in motion by myself and the Boston management, continue uninterrupted. I undertake to keep you up to date of any new developments or progress concerning our legal process against the Bank of America and Tradex Swiss AG.
Yours Sincerely
Craig Karlis
The SFBC responded in kind:
Memorandum
Mandate: SFBC / Tradex and Swiss Garant
Subject: Further information to clients of Tradex Swiss AG
to: Clients of Tradex Swiss AG / file
from: Dr Peter Lutz and Romeo Da Rugna
Date: 3 September 2007
Dear Madam, dear Sir,
we have informed earlier that the Swiss Federal Banking Commission (SFBC) has opened an investigation on Tradex Swiss AG ("Tradex"). The purpose of such investigation is to verify, whether the company has been conducting financial activities without the necessary homecountry licence. The SFBC terminated the signatory power of the former signatories of Tradex and appointed the undersigned Dr Peter Lutz and Romeo Da Rugna to carry out the investigation on behalf of the SFBC. The SFBC granted Dr Peter Lutz and Romeo Da Rugna the exclusive authority, with sole signatory power, to represent and act on behalf of Tradex.
Further to our former information we can give you the following update about the pending investigation: We are at the moment not in a position to complete our investigation since part of the management of Tradex refuses to cooperate with the undersigned and do not deliver requested information and documents in a complete and timely manner.
A part of the management of Tradex even filed a complaint against Tradex in Boston USA. Tradex therefore had to employ US counsel in order to defend this complaint which is seriously obstructing and delaying the pending investigation.
Without the complete information and documentation about all assets and liabilities of Tradex, we are not able to determine which clients and/or creditors have legitimate claims towards Tradex. Therefore, lacking this information and documentation, we can not find out, and we consequently can not exclude, whether there is any risk of preferential treatment of
creditors if now payments are made to individual clients and/or creditors.
Until we do not have a complete overview on all of Tradex' assets and liabilities, we are therefore not in a position to make any transfer to clients and/or creditors of Tradex.
We finally would like to inform that none of the messages which have been sent since 3 July 2007 by the management of Tradex have been authorised by the undersigned. Such messages and information therefore do not reflect the opinion of the undersigned. As soon as the investigation will be completed, you will receive further information.
Yours sincerely
DR PETER LUTZ AND ROMEO DA RUGNA
Investigators appointed by the Swiss Federal Banking Commission
If it is any consolation to the traders stuck in these two firms both the NFA and SFBC are making big changes to try and keep these kinds of things from happening again (NFA by raising capital requirements and SFBC by regulating forex in CHF.) As for everyone else, please conduct your due diligence and avoid poorly capitalized and/or unregulated firms for this is what can happen if you donât.
itrader911
Guest
CFTC Prosecutes Nations
In July I put out an alert to the FX Community about Dead Pool Member Nations Investments, LLC. Well, shortly there after the NFA went in and closed them down. Now it appears the CFTC has stepped in to collect their pound of flesh. Nations was hauled into court by the scruff of their neck by the Feds and a court receiver has now taken over the defunct firm. Have customers lost money? I'll keep everyone informed.
http://www.cftc.gov/newsroom/enforcementpressreleases/2007/pr5380-07.html
U.S. Commodity Futures Trading Commission Files Action Against Futures Commission Merchant Nations Investments, LLC, for Failure to Maintain the Minimum Amount of Net Capital Required by Federal Law
Washington, DC â The U.S. Commodity Futures Trading Commission (CFTC) announced today the filing of a complaint in the U.S. District Court for the Southern District of Florida against Nations Investments, LLC (Nations) of Fort Lauderdale, Florida, a futures commission merchant (FCM) registered with the CFTC.
The complaint alleges violations of the minimum net capital requirements of the Commodity Exchange Act and Commission regulations. More specifically, according to the CFTC complaint, as of July 21, 2007, and perhaps earlier, Nationsâ net capitalization was below the adjusted net capital required by the Act and a Commission regulation. As of July 20, 2007, the complaint charges, Nationsâ adjusted net capitalization remained below the required adjusted net capital with Nationsâ total liabilities equaling $5 million while its assets were less than $2 million.
On July 30, 2007, the Honorable Marcia G. Cooke, U.S. District Court Judge, issued a restraining order freezing the assets of Nations and prohibiting the defendant from destroying documents or denying CFTC staff access to books and records. The Court also froze the assets of relief defendants Sulaiman âSalâ Husain, a Director, Chief Financial Officer, and principal of Nations, and Sammy Joe Goldman, an owner and former principal of Nations. Husain and Goldman allegedly contributed to the undercapitalizationâwhich ultimately rose to approximately $4.5 millionâby withdrawing a total of $1 million from Nationsâ accounts.
On August 7, 2007, the court approved the appointing a receiver to marshal the assets of Nations. In the ongoing action, the CFTC seeks an order of permanent injunction against the defendant, monetary penalties, and other relief.
In July I put out an alert to the FX Community about Dead Pool Member Nations Investments, LLC. Well, shortly there after the NFA went in and closed them down. Now it appears the CFTC has stepped in to collect their pound of flesh. Nations was hauled into court by the scruff of their neck by the Feds and a court receiver has now taken over the defunct firm. Have customers lost money? I'll keep everyone informed.
http://www.cftc.gov/newsroom/enforcementpressreleases/2007/pr5380-07.html
U.S. Commodity Futures Trading Commission Files Action Against Futures Commission Merchant Nations Investments, LLC, for Failure to Maintain the Minimum Amount of Net Capital Required by Federal Law
Washington, DC â The U.S. Commodity Futures Trading Commission (CFTC) announced today the filing of a complaint in the U.S. District Court for the Southern District of Florida against Nations Investments, LLC (Nations) of Fort Lauderdale, Florida, a futures commission merchant (FCM) registered with the CFTC.
The complaint alleges violations of the minimum net capital requirements of the Commodity Exchange Act and Commission regulations. More specifically, according to the CFTC complaint, as of July 21, 2007, and perhaps earlier, Nationsâ net capitalization was below the adjusted net capital required by the Act and a Commission regulation. As of July 20, 2007, the complaint charges, Nationsâ adjusted net capitalization remained below the required adjusted net capital with Nationsâ total liabilities equaling $5 million while its assets were less than $2 million.
On July 30, 2007, the Honorable Marcia G. Cooke, U.S. District Court Judge, issued a restraining order freezing the assets of Nations and prohibiting the defendant from destroying documents or denying CFTC staff access to books and records. The Court also froze the assets of relief defendants Sulaiman âSalâ Husain, a Director, Chief Financial Officer, and principal of Nations, and Sammy Joe Goldman, an owner and former principal of Nations. Husain and Goldman allegedly contributed to the undercapitalizationâwhich ultimately rose to approximately $4.5 millionâby withdrawing a total of $1 million from Nationsâ accounts.
On August 7, 2007, the court approved the appointing a receiver to marshal the assets of Nations. In the ongoing action, the CFTC seeks an order of permanent injunction against the defendant, monetary penalties, and other relief.