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Proposed NFA Capital Requirement
- Thread starter forexsavior
- Start date
a friend of mines has a account with them he loves them, good to see they have there heads way over water, also don't foreget they or a liquidity provider for some brokers interbankfx is one of them, maybe thats the reason for the high cap.Quote from qtip:
FOREX LIQUIDITY LLC
36,104,791 1,000,000 35,104,791 0 0
I thought these guys were the biggest bucket shop of all. Looks like they are doing pretty well.
Quote from Surdo:
Just an head's up>>>> Forexsavior AKA Felix Homogratus is not exactly squeeky clean around the Forex community. Just Google his "name". He is known as Dmitri Chavkerov in his Russian circles.
cheers
I'd offer at least 20:1 odds that forexsavior and Felix are not the same person. They exhibit sharply dissimilar English language usage patterns.
Quote from forexsavior:
Thank you for the reply Steve. You are correct in stating the NFA And CFTC must first approve these proposals before they go into effect. But it is well known inside the industry that the NFA is going to easily approve this and the CFTC will rubber stamp that decision. The NFA's reasoning is very powerful and I can't see any argument that will dissuade them from imposing the new capital requirement. So let's be honest, this is going to happen.
While MB Trading is currently in full compliance with its capital requirements the new $5 million requirement is a very steep hill for your firm to climb. Will you be able to meet the new requirement? Maybe. Maybe not. If not what happens to the traders? Nobody knows the answer to that. And if you look at the wreckage in the industry whenever a small firm such as yours goes under it leaves cause for serious concern.
My advice to MB Trading is to put up the capital now and leave no doubt as to the future viability of MB Trading. Failing to do that means traders have to rely solely on your word. And in this industry, the word of small forex broker dealers isn't worth a bucket of spit.
Let me ask you something. If you had a business with employees and Workers Compensation required you to put up 50K to protect your employees, are you gonna put up 100k just to prove you will indeed protect them?? I think not! Then why should MBT put up more than what is required to prove a point?
agree, plus mbt takes no risk at all, that don't hold costumer trades so there no risk like dealing desk brokers.Quote from traderdave72:
Let me ask you something. If you had a business with employees and Workers Compensation required you to put up 50K to protect your employees, are you gonna put up 100k just to prove you will indeed protect them?? I think not! Then why should MBT put up more than what is required to prove a point?
Quote from traderdave72:
Let me ask you something. If you had a business with employees and Workers Compensation required you to put up 50K to protect your employees, are you gonna put up 100k just to prove you will indeed protect them?? I think not! Then why should MBT put up more than what is required to prove a point?
This line of reasoning does not make any sense at all. Are you saying that MB Trading actually has the money but instead of putting it in a bank account and letting the CFTC know they have the money that instead they are hiding it under the matress?
Quote from Moe27:
agree, plus mbt takes no risk at all, that don't hold costumer trades so there no risk like dealing desk brokers.
All firms including MB Trading have risks. You as a customer are not the counterparty to the trade. It doesn't matter if the firm is a Dealing Desk, Non Dealing Desk or ECN type model. The banks do not have a credit relationship with the customers of these firms. If a customer loses more than the equity in their account the firm has to make good on the trade. MB Trading is the counteryparty to every customers trade.
Thats a small risk compare to a broker holding your trade hoping you lose, thats what margin calls or for. might not work all the time.Quote from Croach:
All firms including MB Trading have risks. You as a customer are not the counterparty to the trade. It doesn't matter if the firm is a Dealing Desk, Non Dealing Desk or ECN type model. The banks do not have a credit relationship with the customers of these firms. If a customer loses more than the equity in their account the firm has to make good on the trade. MB Trading is the counteryparty to every customers trade.
As I continue to update the dead forex firms walking list I'm amazed how many people think fraud and undercapitalization are completely separate issues. Often times they are not. The reason is quite simple: firms that are committing fraud are not known for having legible books. And Vice versa. Firms that have a hard time maintaining their capital requirements will often cut corners and commit fraud to keep their firms from going under. Finally, smaller firms simply don't have the money to maintain the kind of large legal and compliance staffs necessary to keep up with the battery of regulations being issued by the NFA and CFTC. And of course some firms are just plain incompetent. All these factors have come to a head with Forex Dealer Dead Pool Member One World Capital, who is now in serious trouble with regulators.
To see the full report on One World's misdeeds you can click on the NFA's report yourself: http://www.nfa.futures.org/BasicNet/CaseDocument.aspx?seqnum=1190
I have highlighted some of the worst allegations below. After reading through them I think you'll understand why One World is on the dead firm's walking list and why that should be serious cause for concern for anyone who has an account with them or any firm like them.
"One 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."
"The firm was unable to properly account for its liabilities to its forex customers." (Insert appropriate jaw dropping sound. This is the text book definition of a firm destined to go bankrupt.)
"In addition, NFA's audit found that One World and Walsh [Principal] provided false and misleading information to NFA auditors concerning an individual names Charles Martin and his role at One World. Walsh said Martin had no involvement in the firm. However, NFA subsequently learned that Walsh's claim was untrue and that Martin was, in fact, heavily involved in the operations of One World and solicited customers on its behalf." (Who is Charles Martin you ask? The NFA states Martin was turned down to be a principal before because of a "felony drug conviction and a misdemeanor theft conviction.")
It goes on and on, misleading promotional materials, outright lies to regulators, failure to report capital and maintain any semblance of book keeping standards. In short, One World is a classic Dead Forex Firm walking. Firms like One World are the reason the NFA is going to raise capital requirements. And when they do, does anyone honestly believe the One World's of the world will survive?
To see the full report on One World's misdeeds you can click on the NFA's report yourself: http://www.nfa.futures.org/BasicNet/CaseDocument.aspx?seqnum=1190
I have highlighted some of the worst allegations below. After reading through them I think you'll understand why One World is on the dead firm's walking list and why that should be serious cause for concern for anyone who has an account with them or any firm like them.
"One 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."
"The firm was unable to properly account for its liabilities to its forex customers." (Insert appropriate jaw dropping sound. This is the text book definition of a firm destined to go bankrupt.)
"In addition, NFA's audit found that One World and Walsh [Principal] provided false and misleading information to NFA auditors concerning an individual names Charles Martin and his role at One World. Walsh said Martin had no involvement in the firm. However, NFA subsequently learned that Walsh's claim was untrue and that Martin was, in fact, heavily involved in the operations of One World and solicited customers on its behalf." (Who is Charles Martin you ask? The NFA states Martin was turned down to be a principal before because of a "felony drug conviction and a misdemeanor theft conviction.")
It goes on and on, misleading promotional materials, outright lies to regulators, failure to report capital and maintain any semblance of book keeping standards. In short, One World is a classic Dead Forex Firm walking. Firms like One World are the reason the NFA is going to raise capital requirements. And when they do, does anyone honestly believe the One World's of the world will survive?