Hello RobertMc

I will do my best to answer you questions and I thank you very much for your concern.

I spoke with the leader of our group today and found I was personally misinformed as to the company involved. It was NOT Goldman-Sachs, it was a money managers account at US Bank. It was the same situation from what I understand. The money was supposed to be separate from funds used for margin trading. I sincerely apologize for this; when we discussed the shutdown as a group, I had understood it to be Goldman-Sachs. Nevertheless, as Ms. Sunu's letter pointed out, they still consider our money to be an asset of FXLQ.

"With respect to the classification of customer funds as assets of FXLQ,
this is a standard accounting issue. For all financial institutions who
hold customer funds (including broker-dealers and futures commission
merchants whose customers trade on-exchange futures), customer funds are
listed on the firm's books as an asset, which is off-set by liabilities
owed to customers."

And also
"Additionally, FXLQ had no funds at Goldman Sachs at any point, although they did have funds at several other financial institutions."

I am now assuming this included the money managers account at US Bank.

As to the trades-
"While it is true that customers could not put on any new positions,
customers were able to liquidate existing positions, or continue to
roll-over trades if they wanted to keep the position on. Therefore, you
did have the ability to keep a trade and close it out when you deemed
that to be appropriate."

This is both true and in my opinion untrue. They did allow rollover, and they did allow you to liquidate existing positions. However, what they did not allow was critical modifications to existing positions to allow them to be closed safely.

I personally do not know exactly how our trade was being managed, but I can and will explain the basis of carry trades, which is what this was. The essential purpose of a carry trade is to earn interest and not necessarily to earn profit on the movement of the currency. There are pairs that pay a high rate of daily interest. You may either hedge the same pair, or put half in one pair and half in another also as a hedge. Therefore HALF of the trade (depending on how it is being managed) may be running fairly close to a margin call, because it is losing in terms of the movement of the currency, however it may be gaining interest. I am not an expert on this process, the person managing the trade was and is. The point is that half of the trade was losing, and the person managing the trade was not allowed to do anything with it including moving the SL. If some notice had been given, he had a plan in place he was using at the time to manage this trade, but he was given no notice and was therefore unable to salvage the trade costing us about 50% of our money.

I wrote to Ms Sunu at the time, telling her that I personally find the tactics the NFA used to be gestapo like. The problem is NOT that they took action, as membership in the NFA is voluntary, but that NO respect was shown to the TRADERS that made their livelihood at FXLQ. I told this to Ms. Sunu in my letter asking her how she'd like to be fired from her job with no notice, no reprimand, and NO UNEMPLOYMENT. To me, some sort of WARNING, not a request for information, should have been issued to FXLQ with requirements to pass the information of suspected NFA violations on to traders. I still feel very angry about this. I was taking a personal vacation from trading for health reasons and I had put not only my funds, but an account I was managing for a friend in the hands of someone I felt was a good trader, only to have this happen.

The statement about customers being told that FXLQ had the funds to pay back customers by staff is apparently true as well, as our funds manager received a personal call from one of the higher ups within a few days of the shutdown saying that FXLQ had the funds to pay all customer accounts.

To summarize. The statement I made, "In my understanding the horrifying thing was that in spite of our vehement protests when the NFA shut down FXLQ they FROZE the Goldman-Sachs account, and WORSE than all that, it has been declared an ASSET of FXLQ, and subject to CREDITORS which at least DOES include us, but does NOT exclude others who are not traders. In other words the electric company has the same rights on our money that we do because they are creditors as well." remains true except that it was the US Bank Managers account instead of Goldman-Sachs. Again my apologies.

Robert M, you said,
"I await your response and I will be contacting Gov. Crist to see if
there is anything we can do to put a stop to the tremendous amount of
scams and lack of regulation the forex market has in Florida and
nationwide."

Robert, I am grateful for your concern.

Please consider the following though. I obviously do think there are problems in the Forex industry. MANY. But it is still a place where the little guy can get it, have some fun, make some money , and once he goes through the bumps eventually make a living from it. Sadly, I find the regulators to be just as bad as the bad brokers they are trying to regulate. I think the more government regulation there is, the less likely it will be that the little guy will be allowed to invest and learn, as the brokers will start spending huge amounts of money trying to follow all these regulations that they will simply stop taking less than thousands of dollars which will probably also be then included in the regulations. That in turn will eventually by their very nature take one of the few remaining places that the little guy has a chance to make money.

I personally believe the best answer to this is for traders to get together forming a powerful organization starting by simply protecting themselves from broker shutdowns, but so far I haven't seen anyone besides myself willing to get down and work for it unless they think there is a better way. It isn't going to do me any good by myself. I have already taken the steps that I recommend for individual traders, and that was further explained by forexmgr. Think about what an effect it would have that if a broker was messing with clients the way some MT brokers do, that they were suddenly threatened with losing even a fourth of their accounts? Together we can make a REAL change.
My 2 cents worth.

I hope Linuxser, that I have done my job and explained a little better and I thank you for all your excellent work here as you are doing a wonderful service to traders by helping this forum. ;-)

Best to both of you!!!!

__________________
"If I have not love, I am nothing." So what is love? Is it our present day romantic notions? To me not. To me love is the willingness from the heart to serve others with respect, kindness and practicality in whatever way God gives us. As we serve others in this fashion we serve and reflect Him who made us all.