Proposed NFA Capital Requirement

[forexsavior]

The Lies Swiss Brokers Tell

What really burns me up about this Aleccoh guy at the Forex TSD thread is his out and out lies about how his firm was supposedly regulated. A customer asked him specifically in December of 2007 if his company was regulated and asked him if he had a registration number. Mr. Aleccoh stated, “Aleccohfx SA is regulated and run according to the Swiss law under OAR-G Swiss Regulation Official Body Funded by GSCGI.” As I have demonstrated on this thread numerous times OAR-G, ARIF, etc does not mean jack squat in terms of forex regulation. Those are mere certifications stating the firm will abide by Swiss money laundering laws. That’s it! It is not legit “regulation” and traditionally there has been no regulatory agency checking in on these brokers (hence the reason these brokers all now have to get a bank license or close.) These Swiss brokers know that but they continue to lie to the public and claim they are regulated WHEN THEY CLEARLY ARE NOT.

When another trader calls him out on this “Aleccoh” claims, no OAR-G is just like the NFA. He also went on to say that Aleccoh FX would be applying for a banking license. Then shortly after that claimed he didn’t need to get a banking license since the new law in Switzerland only applied to “liquidity providers” and not retail brokers.

Then it all hits the fan and he states, “I am not in charge anymore of aleccohfx because of the fact that the new Swiss regulations forbid me to be in charge or any of my team since we are traders and that it is forbidden to be traders and brokers.” He then claimed to be applying for registration with the NFA in the United States …

Reading through this thread is maddening. You simply can’t trust a single word that comes out of the mouths of these Swiss Forex Dealers. And don’t think this is an aberration. Every Swiss broker has been lying to the public about their regulatory status. DukasCopy, MIG, ACM have all been bamboozling traders about their regulatory status claiming their membership in limp wristed organizations like “ARIF” were somehow the equivalent of being regulated by regulatory agencies like the FSA and NFA.

But the fact is as it stands today none of these firms have real registrations with a real regulatory body. Not ACM. Not DukasCopy. Not MIG. Until they actually GET a banking license don’t put money on deposit with them. They have not been straight with the public and as the Aleccoh FX scam proves a broker’s words don’t mean squat unless they are backed up by the rule of law.

 

[forexsavior]

Dirty Rotten Scoundrel

As I have illustrated on this thread there is no shortage of colorful con artists in the forex business. Yet there is one criminal mastermind in particular who always seems to skate away from his on ice thuggery with more dexterity than one of the Hanson Brothers. His name is Robert Gray. And when he wields the high stick more than just a few teeth go flying into the blood splattered night...

So who is this guy? How has he been able to cut such a swath through the forex industry for all these years? And how was he able to con, not just ordinary traders, but top U.S. Regulatory Agencies themselves? Well, he was able to do it using that old American adage that "Practice makes Perfect."

The Rob Gray story starts back in the go go 80's on that notorious stretch of highway running from Boca Raton to Miami known to the Feds as "Maggot Mile."

It was December 11, 1986, when our goodfella to be got started in the futures industry by applying to be an associate member of the NFA with the firm Multivest Options Inc and International Precious Metals Corp Inc in Fort Lauderdale.
http://www.nfa.futures.org/basicnet/Details.aspx?entityid=0196740&rn=Y

But Gray's career with these two firms would be short lived and by the summer of 1987 he was no longer licensed by the NFA and had apparently left these brokerages. Multivest itself would eventually be closed down for gross fraud within a few years.

Let's role the tape and see how Gray got his start as a forex huckster:

Multivest Options Inc was one of the many futures industry orifices oozing with criminality during the decade of greed. The firm all by itself had over 120 Reparations Cases with the CFTC.
http://www.nfa.futures.org/BasicNet/Details.aspx?entityid=0001646

In 1988 the NFA settled a case with Multivest in which numerous salesmen were cited for fraud and high pressure sales tactics. http://www.nfa.futures.org/BasicNet/Case.aspx?entityid=0001646&case=90-6050&contrib=CFTC

And then in 1990 the CFTC shut them down for good stating:
http://www.nfa.futures.org/BasicNet/Case.aspx?entityid=0001646&case=90-6050&contrib=CFTC

"from June 1987 through October 1989, MultiVest, while soliciting almost 15,000 customers to invest in commodity options, misrepresented the likelihood of profit in trading commodity options, MultiVest's success rate, the risks in trading commodity options, the expertise and experience of MultiVest's sales people, and the extent and quality of MultiVest's market research. MultiVest was also charged with failing to supervise the handling of commodity options accounts by its salespeople."

So this is the firm that gave birth to Robert Gray, a fraudulent futures firm that sold bogus options to the gullible Senior Citizens of Seizure World, USA.

The trail goes cold in the 1990's although rumor has it he gravitated over to the stock market (I can't imagine Gray missed out on the greatest con off them all, the Internet Stock Bubble...) But his grand debut in the forex world appears to be in 2000 at FXCM of all places. According to a hilarious story I picked up at the New York Traders Expo a couple months ago Gray was the head of sales at FXCM and in a feat of treachery worthy of an Italian Opera he bolted the company with all FXCM's clients on a floppy disk and went to work at FX Solutions! Well done Rob, Lord Vader from MultiVest trained you well...

But it appears FX Solutions was not all the grateful as he lasted all of three months in their employ according to the NFA's Registration Records.
http://www.nfa.futures.org/basicnet/Details.aspx?entityid=0196740&rn=Y

Where to next for this Son of the Sith? Well, how about Director of Global Forex Operations for GFS Forex & Futures. Good Lord, how on earth did Robert Gray land this gig? Doesn't ANYONE do background checks anymore? Apparently not. Check out this article from 2003 which discusses the growing popularity of mini trading in FX:
http://www.allbusiness.com/specialty-businesses/565252-1.html

GFS Securities & Futures got on board a few months ago in March. "It was very much a client-driven decision," says Robert Gray, director of global forex operations for GFS. "The regulatory environment that the markets exist in now is really fueling forex in general."

Ok for Robert Gray of all people to speak glowingly about the "regulatory environment" for forex is to redefine the meaning of "Chutzpah." Call it "Grayzpah." And how about this for Grayzpah. In this lawsuit filed by the State of Colorado in 2004 Robert Gray is listed as a "Compliance Officer" with GFS. What on earth does Robert Gray know about compliance?That's the equivalent of having Michael Jackson as your babysitter. http://www.dora.state.co.us/securities/pdf_forms/xlcapital receiver's 1st int rpt.pdf.

Another interesting note from this lawsuit is the admission that GFS cleared all its trades through Interbank FX. Which brings us to Part II of Dirty Rotten Scoundrel, stay tuned...

 

[Aboushi]

http://elitetrader.com/vb/showthread.php?s=&threadid=114662&perpage=6&pagenumber=6

I am not gonna retype it

 

[forexsavior]

Dirty Rotten Scoundrel- Part II

When last we left off Robert Gray was busy handing over the financial records of a shady managed funds firm operating under his nose at GFS to government prosecutors. As the court document described GFS was clearing its trades through Interbank FX.

The marriage between Gray and IBFX then became fully consummated in 2005. In March of that year according to the NFA Gray applied to be a Principal with Interbank FX. No telling if he ran over to IBFX with all GFS' clients but in any case he appears to have officially stayed at IBFX for about six months.

Unofficially? This is where things get very murky. Gray withdrew his license with IBFX on October 1, 2005 and applied for a new one with a newly created FCM, Forex Liquidity, on October 28, 2005. It was at FXLQ where Gray would cook up his piece de resistance, concocting an imaginary $35 million bond out of thin air and using that to pad FXLQ's official adjusted net capital number.

I won't rehash the collapse of FXLQ again but if you would like a full recap feel free to go here:
http://www.fxstreet.com/forum/showpost.php?p=8382&postcount=95

While Gray officially cut his ties to IBFX in 2005 there was still a business relationship between the two as evidenced by the fact that FXLQ was a prime provider of liquidity to IBFX. A debate has risen on the bulletin boards as to how dependent IBFX was on FXLQ in providing it with liquidity. In particular one dubious poster on FX Street claims IBFX for a long time was merely a white label of FXLQ and was somehow bound to Robert Gray for life:
http://weblog.fxstreet.com/2007/12/interbankfx-rel.html

From: Dan Campbell, Pipland, USA
Date of Post: 2007-12-05

Review: I've been trying to warn folks for over 2 years now (read my threads below, I used to work there), but justice is finally being servered, "to some degree". Forex Liquidity (FXLQ) is finally under investigation from the NFA. To recap: InterbankFX (IBFX) is a white label of FXLQ. Hense they are able to say "no dealing desk". Because in fact "IBFX" does not have a dealing, but rather it's at FXLQ where all IBFX customers clear their trades...

Sadly, as with most NFA "investigations", nothing will be done, but this should be a hugh warning bell for everyone using IBFX. Following the bread crumbs folks...

http://www.nfa.futures.org/basicnet/Details.aspx?entityid=0362216&rn=Y
http://www.nfa.futures.org/basicnet/Case.aspx?entityid=0362216&case=07MRA00013&contrib=NFA
http://www.fxlq.com/

The white label charge comes off as a bit of conspiracy mongering on the part of this Dan Campbell as IBFX continues to operate for the most part without incident even as FXLQ has been shut down. But it does beg the question how on earth did Robert Gray accrue so much influence in this industry?

Gray has been linked to numerous firms from FXDD, to Spencer Financial to Velocity FX. Google him and his name appears all over the bulletin boards like a plague bacillus. http://www.elitetrader.com/vb/showthread.php?s=&threadid=75753&highlight
http://forexbastards.com/forum/inde...96&min=0&num=15
http://www.moneytec.com/forums/f33/...//www.forexfactory.com/showthread.php?t=44998

So deep is his influence that he even pops up in China heading up another fx brokerage called MultiBank FX (great mugshot of Gary on page 7):
http://www.fxmultibank.com/pdf/brochure.pdf

And while IBFX may still be up and running their relationship with Robert Gray has cost them dearly as FXLQ owes Interbank over $10 million in frozen assets according to FXLQ's own Receiver:
http://www.robbevans.com/pdf/forexlqreport01.pdf

It's my hope that the new NFA Capital Requirement increase to $5 million will help weed out the Robert Grays of the FX World. Gray flourished in the weeds of the industry at small firms that never seemed to get the NFA's attention. But with the industry reduced to 24 domestic firms and with new rules set to require all Introducing Brokers be licensed his time will have come and gone and none too soon.

I read at one of these links that Robert Gray has an Irish passport and that if things ever get too rough he can always hop on Aer Lingus and live out his days shepherding sheep on a quiet farm outside Galway. Well, should that day come I'm sure the forex trading community will sing in unison:

Oh Robbie Boy, the pipes, the pipes are calling
From glen to glen, and down the mountainside.
The summer's gone, and all the flowers are dying.
'Tis you, 'tis you must go and we gladly say goodbye.

But come ye not back when summer's in the meadow
Or when the valley's hushed and white with snow,
'Tis we'll dread you be there in sunshine or in shadow.
Oh Robbie Boy, Oh Robbie Boy, we loathe you so...

 

[jaytrader100]

I do not understand why "IDIOTS" trade the fx spot currencies with small accounts when they could be "protected" by trading currency futures at the merc... and they get volume as well!
The forex companies are measured in millions while CME and fcm have billions and billions.. duh

 

[forexsavior]

Quote from jaytrader100:

I do not understand why "IDIOTS" trade the fx spot currencies with small accounts when they could be "protected" by trading currency futures at the merc... and they get volume as well!
The forex companies are measured in millions while CME and fcm have billions and billions.. duh

People don't trade currency futures because they are impractical to day trade. Execution is lousy, the spreads are too wide and the margin is unattractive. The CME is a dinosaur. Certainly they are more stable than the forex firms I write about. But they are behind the times.

 

[jaytrader100]

you might want to wake up and jump into the year 2008.. hello
the spreads are just as narrow as the FX markets .. there is arbitrage going on between futures and spot fx whihc means the computers are keeping the spreads in line and tight.. the funny thing is you are trading mainly against a dealing desk that sees all of your orders and stops etc.. they also do not show you volume.. at the merc.. the playing field is more level and you get total volume ..price and volume.. FX spot is riddled with ex commodity brokers who lost thier licenses due to fraudulent business practices.. it is a loop hole that should be filled soon.. also .. no commission.. bullcrap.. you pay for it due to the dealing desk that sees your order and trades against you etc.. you should look at the electronic Euro FX at the merc.. tight tight spreads and big volume.. 200K plus contracts traded per day more than enough for anyone who posts on this board.

 

[forexsavior]

Quote from jaytrader100:

you might want to wake up and jump into the year 2008.. hello
the spreads are just as narrow as the FX markets .. there is arbitrage going on between futures and spot fx whihc means the computers are keeping the spreads in line and tight.. the funny thing is you are trading mainly against a dealing desk that sees all of your orders and stops etc.. they also do not show you volume.. at the merc.. the playing field is more level and you get total volume ..price and volume.. FX spot is riddled with ex commodity brokers who lost thier licenses due to fraudulent business practices.. it is a loop hole that should be filled soon.. also .. no commission.. bullcrap.. you pay for it due to the dealing desk that sees your order and trades against you etc.. you should look at the electronic Euro FX at the merc.. tight tight spreads and big volume.. 200K plus contracts traded per day more than enough for anyone who posts on this board.

I forgot about the commissions. Thanks for reminding me. So in futures you pay Spread AND Commissions. Another reason to trade spot fx. Look you want to trade pork bellies or orange juice than futures is the place to be. But in forex trading serious traders don't trade futures, they trade spot. Just ask George Soros.

 

[jaytrader100]

i am done with you.. go ahead and keep playing equity roulette wiht your little tiny FX firms.. do you think for a second soros or anyone for that matter with a lot of capital uses those littel bucket shops to trade fx? No way.. they use banks lioke goldman , jpm etc.. look at the amount of money or should i say look at the low amount of money your littel fx firms have in total customer assets.. it's measured in millions not billions.. i'll trade pork bellies over retail spot fx any day.. at least i know tomorrow morning my segregated funds should be intact.
Good luck to you

http://www.cftc.gov/customerprotection/fraudawarenessandprevention/forex/index.htm

 

[forexsavior]

Quote from jaytrader100:

i am done with you.. go ahead and keep playing equity roulette wiht your little tiny FX firms.. .. i'll trade pork bellies over retail spot fx any day.. at least i know tomorrow morning my segregated funds should be intact.
Good luck to you

http://www.cftc.gov/customerprotection/fraudawarenessandprevention/forex/index.htm

There are several banks also offering spot forex to retail traders. The issue isn't the dealer it's the financial product. If you want to continue flacking for the CME that's your business but you aren't going to convince forex traders that trading currency futures is more efficient than trading spot forex. It just isn't. have fun with your pork bellies.