That's the question.

Who verify that the excess net capital really exist ?

What happen to those customers who didn't open accounts with smaller and untrusted FCM brokers because of the CFTC report and went to the top capitalized company ?

As a customer, how I can trust again on a CFTC report ?

This another Refco case ?

If I remember fine 1 or 2 months before Refco went down they had over 500 millions in the CFTC report.

Something need to change here. I hope that FXLQ customers can get their money back, I don't have an account there, but I was just at the point to open one of their institutional 1 pip spread accounts. I didn't submitted the application just because I was busy during previous weeks testing their demo platform and I delayed that because I detected some inconsistencies like the replacement of previous day data with new data, this happened most days at 20 hours broker time in their institutional demo server, this tactic is like changing the past, and I wondered many times why they did that. This issue can be a technical without relation with their financial status, but I didn't like it either.

I have friends with some hundred of thousand in deposits there.

__________________
I have not failed. I've just found 10,000 ways that won't work.
Thomas Alva Edison

10:20AM, Still no trading on Fast Brokers. Yes, a Pawn Broker Would Not miss 41 million!!!

__________________
Not Everything that looks straight is: Until you measure it.

I'm not sure what affiliation Aleccohfx has with them but Aleccoh (owner) has just made a special post, decribing them as honest, and that your money is safe...

Yikes! - things must be bad...

does anyone know IBFX's affliation with FXLQ? Didn't IBFX used to clear through FXLQ?

what a nightmare for alot of people. I really feel for them.

Of all the scandals I have reported on to date this one is by far the most disturbing. The main reason is because FXLQ appears to have defrauded, not just the trading public, but more importantly U.S. regulators. And did it in such a bold manner as to send chills down the spines of anyone concerned about due diligence.

Yesterday the NFA took a member responsibility action against Forex Liquidity that prevents them from accepting any new customers, distributing customer funds without their approval, and requires that FXLQ provide NFA with a full accounting of their financials, which they have been unwilling to do as of this date:
BASIC Case Summary

Why has the NFA taken this action? Let's go right to the source, the NFA auditor's own affidavit:

Ah yes, FXLQ reported adjusted net capital of $36 million on their last CFTC report. These guys have been telling regulators all year they have plenty of capital.

I'm curious to know what contractual services Robert Gray provided that earned him a $35 million bond? A quick search on the Internet shows Swiss Imperial does simple accounting work (Swiss Imperial Trust Ag - Zug, Switzerland | Company Profile). So why would a forex dealer be billing an accountant $35 milllion? Isn't it supposed to work the other way around?

Hmmm. This is interesting. So the bond and cash are not sitting in a brokerage account for FXLQ. The bond and cash are actually sitting in Switzerland at Swiss Imperial in an account marked "Malory?" Now that sounds very fishy indeed.

No worries, Mr. Gray can just request the funds be transferred back to the U.S. to FXLQ's domestic bank/brokerage account right? Right? RIGHT?!!!

You have got to be kidding me. Let's see, Robert Gray is transferring nearly $48 million in cash and securities and he "doesn't recall" the name of the bank the money is going to?! How can he sit there and tell the NFA that with a straight face? He probably wasn't. I can picture him now scrunched up in the corner of his office, shivering and biting his nails like a man about to be water boarded trying to tell the NFA anything if they'll just go away and let him get back to reaming traders unfortunate enough to sign up with him:
Forums - Any Recommendation for MT4 based Fx Broker

Is Robert Gray a complete idiot? Why the hell would you lie to the NFA and give them a fake account number KNOWING NFA is going to check to see if this account actually exists?

Why didn't Rob Gray just get on an airplane and fly out of the country? Why go through this farcical con job in light of the fact that a two year old could see through this BS? But no, Gray continues to spin like Larry Craig after getting caught with his pants down in a Minneapolis washroom.

"non-current assets." How about "never-were assets." It looks like FXLQ created this bond out of thin air to fatten up their balance sheet. What's the matter FXLQ? Are you ashamed to be a poorly capitalized firm?

It's one thing to fib about your company assets. But are they doing this to cover up huge company losses which has left them $10 million in the hole? That of course is the nightmare scenario and could explain why Gray has been desperately trying to throw the NFA off his tracks.

This case is pretty serious. And I wouldn't be surprised if the feds break down the door of FXLQ and raid the place. If this bond is fictitious that is the kind of fraud that gets you thrown in the slammer for a number of years. This isn't just a matter of having shoddy book keeping as we have seen with firms such as One World Capital or Concorde Financial. This sounds like gross fraud and if FXLQ is indeed in the hole to tune of $10 million a lot of people are gonna get hurt. It's time to come clean Mr. Gray. What the hell is going on at Forex Liquidity?

and doesnt it just make this thread a complete waste of time, it seems anyone can make up a balance sheet so they can run a forex brokerage.

If the NFA had done their job properly in the first place then FXQL wouldnt be in business, it seems that you can tell the NFA black is white and white is black and that they accept this at face value.

So Forexsaviour why bother reporting on capitalisation at all!!!!

Not sure why you are 'picking' on this thread - forexsaviour has already highlighted many brokers as 'suspect', months in advance, and who are now out of business - this in itself was a valuable public service!

Anyway, I have always found it a good read

I share your frustration Smotty. FXLQ's adjusted net capital went from $2 million to $36 million between April and May of 2007. Now that is a huge bump up in capital and indicates they got some money from somewhere.

However, unlike other firms like Oanda which issued a press release announcing they had new investors, FXLQ said nothing publically. It appears now they just dumped this bogus bond on to their balance sheet. The NFA should have closely scrutinized this but they appear to have let it slide. It could be because they didn't have proof of wrongdoing and only received that proof after the NASD gave it to them.

In any case, this does not reflect well upon the regulators, or the industry. While I think trust in the CFTC net capital report has certainly taken a hit and I won't look at it quite the same way, it appears FXLQ was a poorly capitalized firm all along- with all the problems that come with being poorly capitalized.

Thank you for your insight Forexsavior.

As a client (victim?) of FastFX/FXLQ I appreciate the commentary you provided. I am a not adept with recognizing all the legalese that is being tossed around in case documents and such so its good to see it put in layman's terms.

__________________
All your pips are belong to us!

in light of FXLQ, velocity4x is an IB for them. v4x sent the following: