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The Legal Dilemma with these prop firms
- Thread starter ProgrammerGuy
- Start date
Quote from Don Bright:
I really don't know why all the fuss in the first place.
Don
So I had my aunt read the Bright Trading contract. Believe it or not, there is a clause in the Bright trading contract that says something to the effect of âyou are responsible of any penalties incurred by the companyâ I read that and though you have got to be out of your mind. Also, Bright Trading like Assent has complete control, and you must agree that the class A members (again who arenât you) have freedom to change all the terms and conditions of the contract and you must abide by the new rules.
Don you're a smart guy. It seems to me like you are completely dodging the question at stake. Instead of addressing the question or concern the legal contract, you say things like well check us out, meet the people.
The question address was about your legal contract. Don't you agree that it is a little too much to ask people to sign and be responsible for penalities of the company. So say the firm (not me) does something against regulations and is fined 1,000,000. I don't want to be responsible for that.
The trader takes responsibilty for any penalties that "they" incur that have the Firm named because the we are all members of the firm....and the traders are "Limited Liability Members" of the firm, and the penalty would be in the firm's name as we are the broker dealer. I'm not going to keep debating this. The contracti is what it is, probably better than most, we are probably the most transparent and secure firm on the Street.
Contracts are given to traders when they make out the U-4 application to begin licensing procedures.
Don
Contracts are given to traders when they make out the U-4 application to begin licensing procedures.
Don
I am a retail trader and have more than enough in my account to more than hurt myself so I am not attracted to a prop firm in order to increase my leverage. My costs are also cheaper than what the same costs would be at a prop firm (I believe anyway).
However, it is my understanding that if I put up $25k to join a prop firm. Then my 'total risk' would never exceed that $25k.
In the case of a terrorist attact or some terrible unexpected event if someone is trading within a prop firm, because of the LLC entity, their risk is fixed and limited.
Since we are talking about risk and prop firms I thought I would ask this question. Can the prop firm be used to limit exposure to major events? The firm may be ruined, but the individual risk is limited to the amount used to join the prop firm. Is this a correct statement?
Also, since a prop trader is a member of the LLC does his individual risk exceed the amount used to join the firm for possible errors of other traders in the firm?
Thank you for your replies.
However, it is my understanding that if I put up $25k to join a prop firm. Then my 'total risk' would never exceed that $25k.
In the case of a terrorist attact or some terrible unexpected event if someone is trading within a prop firm, because of the LLC entity, their risk is fixed and limited.
Since we are talking about risk and prop firms I thought I would ask this question. Can the prop firm be used to limit exposure to major events? The firm may be ruined, but the individual risk is limited to the amount used to join the prop firm. Is this a correct statement?
Also, since a prop trader is a member of the LLC does his individual risk exceed the amount used to join the firm for possible errors of other traders in the firm?
Thank you for your replies.
That contract is as as good as a piece of toilet paper. Lets say I violated the terms of the contract. Well, Don is going to have to enforce it. He will have to get an attorney who will then have to find me and serve the papers. Once he gets a judgement in court, then he will have to find a way to collect. Im just a little guy, a small player at the card table, who can run out of the casino and then they will have to chase me down. In fact, I have been sued before and they couldnt find me to serve the papers. Tough luck.
On the other hand, since Don is the casino, there is no place for him to hide.
A retail trader can lose his shirt. All you have to lose here is $5000 which isnt that much cash to lose.
Don is willing to train you where as other places wont or give you a "mentor". The "mentor" is usually a guy who doesnt really care about you, he is concerned with his own book. I work for a prop firm right now and can honestly say that Don has a good setup going. No other firm provides the service he does.
If you play around with 100 grand of your cash in a retail account, then you can lose more then 100 grand. That possibility always exist. However, if you play around with Don's cash, then all you can lose is 5 grand. If Don sues you, dont worry. He has to serve you and, then once its all over, he has to collect.
It is Don who is sitting here with a target on his chest, not you.
On the other hand, since Don is the casino, there is no place for him to hide.
A retail trader can lose his shirt. All you have to lose here is $5000 which isnt that much cash to lose.
Don is willing to train you where as other places wont or give you a "mentor". The "mentor" is usually a guy who doesnt really care about you, he is concerned with his own book. I work for a prop firm right now and can honestly say that Don has a good setup going. No other firm provides the service he does.
If you play around with 100 grand of your cash in a retail account, then you can lose more then 100 grand. That possibility always exist. However, if you play around with Don's cash, then all you can lose is 5 grand. If Don sues you, dont worry. He has to serve you and, then once its all over, he has to collect.
It is Don who is sitting here with a target on his chest, not you.
Honestly, I dont get grumpy from trading or gambling, but I get grumpy at the conditions I have to work under. My firm is like an off-broadway play, way off-broadway. Cramped office, lots of cubicles, etc. The contract is very one sided. I feel like those filipinos who whored themselves out on dateline to be honest.
The contract is one-sided for sure, but Im only throwing down a little bit of cash. I've turned a humble amount from it so far, but I'll get better in time.
The contract is one-sided for sure, but Im only throwing down a little bit of cash. I've turned a humble amount from it so far, but I'll get better in time.
If not for prop, where else would I get an 8-figure buying power?
No where.
Besides, in the highly unlikely event that a rouge trader blows up Echo, the firm would still get an immediate bailout from Merrill (Parent company of Echo). I'm not worried.
No where.
Besides, in the highly unlikely event that a rouge trader blows up Echo, the firm would still get an immediate bailout from Merrill (Parent company of Echo). I'm not worried.