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who said life is fair?...who in the world would be depositing to Crown?
ES
Quote:
Originally Posted by kol8701
How do you know this? They don't mind deposit and they don't honor withdrawals for now, does that sound right coz i know they stil accept deposit from new customers.
Just when you thought $20 million would be the final line of demarcation for U.S. based forex brokers the National Futures Association has announced that capital requirements will be going even higher:
Subsection (a)(ii) applies to Forex Dealer Members that execute any customer transactions other than by using straight-through processing and that also have liabilities to customers of more than $10 million. Where it applies, the Member’s capital requirement is the minimum capital required by subsection (a)(i) plus 5% of the liabilities over $10 million.
For example, if the minimum capital requirement is $20 million, a Forex Dealer Member that operates a dealing desk and has $208 million in liabilities to customers would be required to maintain adjusted net capital equal to or in excess of $29.9 million.
Forex Dealer Members with over $10 million in customer liabilities are subject to this alternative requirement unless they execute all customer transactions using straight-through processing. Straight-through processing refers to platforms that automatically (without human intervention and without exception) enter into an identical but opposite transaction with another counterparty, creating an offsetting position in the Forex Dealer Member’s own name. A Forex Dealer Member that offers several platforms will be exempt from this requirement only if each platform executes all customer orders using straight-through-processing.
Wow. So unless a forex firm hands off every trade to a bank they have to pay this whopping 5% tax on their customer liabilities. Only a handful of firms offer STP execution. It appears the NFA is trying to encourage more firms to go in that direction.
I like it. We all know that these brokers are playing with the orders with their dealing desk. It is about time they actually earn their pay, and let the market decide a trader's fate.
__________________
Life is a Gamble. You win some. You lose some. And life goes on.
Crown was an unregulated Swiss broker and thus their demise is certainly not a surprise. This is always the chance customers take when they open an account with an unregulated broker. Nevertheless, traders need to beware trading with any Swiss brokers unless they have a banking license. Let the corpse of Crown Forex be all the proof you need.
Now that Swiss Regulators have pulled the sheet up over Crown Forex’s rigamortis racked cadaver it is time to ascertain the cause of death. Was it fraud? Was it incompetent management? Was it a complete lack of regulatory oversight? Was it a faulty business model? Or was it all of the above?
A good place to start is a thread that was started over at FX Fisherman by a former customer of Crown Forex in March of 2007, back when Crown Forex was strutting through the snow capped valleys of Switzerland with the cocky assurance that they had the world in the palm of their hand.
Been trading on Crown Forex for some time now, and sure enough, discovered that the old adage "if if it too good to be true, it probably isn't" holds true once again.
The Lure: One pip spreads on all 7 majors
The Bait: Demo trading with near perfect execution ('made' 125k just messing around on demo one session, when the price was bouncing about 15 pips either way.. and trading 100 lot orders)
The Hook: Far from instant execution.. and even the worst requote system I have seen in my limited broker experience (4 different ones).
The Reel: Even during relatively 'slow' markets, my RFQ (request for quote) would take upwards of 10 to 15 SECONDS before execution. Mind you, this is when the price wasn't moving AT ALL. No, the dealers would sometimes just wait to see if it moved against my request, and fill... or, in my direction, and requote!! Did you hear that? Wait FIFTEEN seconds when the price was stagnant to see which way it would move. If it moved FOR me, requote. If against, instant fill (before I could cancel... which they wouldn't always allow anyway, in keeping with the above scam)
The Net: Even if at times I would accept the requote, if the market was still moving IN THE DIRECTION I anticipated, I would get subsequent requotes... and again, each time it could literally take 5 or more seconds to 'see' if the market was continuing in my direction. For those of you not understanding the implications, allow me to boil it down. The supposed ONE pip spread in effect at times became 7, 8, 10 or MORE pips!!
In the Boat: I even have a screen shot of a requote where they are offering a price TWO pips above even the current market price. Wow, how gullible do those dealers think I am?
Flopping on the bottom of the boat, gasping for air: This may be a naive revelation... many may already suspect or know this to be fact. No matter. My conclusion of this all leads me to believe this: Crown Forex, and I am sure many others out there, are not dealing off your position. Meaning, when you buy, they aren't selling at the same time. And vice versa. No, since 80 to 90% or more of forex traders quit, go bust, or give a substantial amount of money to the market, I am convinced that the dealers are taking the other side of your position, assuming you don't know what you are doing and won't last long any way. Does any one else here see a conflict of interest? Seems to me, your dealer should be on your side, trying to keep you in the game, because in theory they SHOULD be making their money on the spread, high volume, and obviously longtime customers. In fact, I am convinced, that is not the case. They are not on our side, "working" for us so to speak (remember, spot Forex dealing is very competitive, so let's not forget who the CUSTOMER is!); in fact, quite the opposite.
Our only retaliation? Hurt their business by informing the community of forex traders, thereby reducing the lure of "one pip spread" to the scam that it is. You are better off finding yourself a dealer with quick fills of 2 to 3 pips, than to open an account with Crown Forex, as their spreads effectively are much, much larger than this.
Any firm that is promising a guaranteed one point spread should automatically be written off for suspicion of fraud. It just isn’t possible in the forex market. Something has to give. And in Crown Forex’s case they reneged on their promise by constantly requoting their customers and refusing to allow them to deal on their phantom one point spreads.
But this wasn’t the only fraudulent marketing tactic of Crown Forex. Go to their own website and you can see a variety of bogus promises, such as, “Secured Funds.” Secured Funds? This is a company that hasn’t allowed it customers to withdraw their funds for months! If that is security I hate to see what their idea of “non-secured” funds is.
So in determining cause of death it does appear fraud is one likely cause. But another likely cause is incompetent management and employing a faulty business model. If you are serious about being a long-term forex dealer you simply don’t operate without a legitimate license. Yet, Crown Forex set up its base of operations in the notorious Swiss forex market, which over the years has become a haven for fraud and corporate malfeasance. They were never subject to audits, capital requirements or basic financial standards that other brokers around the world are subject too. This allowed their management team to get sloppy and cut corners, which they are now paying dearly for.
In the end Crown Forex got what it deserved. Sadly, too many innocent customers are being hurt in the process. Once again, traders should beware trading with any firm that doesn’t have a license. In Switzerland, that means a banking license for anyone offering forex. Not a pending license, or a pending application, but AN ACTUAL LICENSE. And right now there are no major Swiss brokers who have actually gotten a banking license to date.
The CFTC has just released their latest net capital figures. AMIFX saw its net capital double. And with their new website it looks like they have gotten an injection of cash from somewhere. Forex Club’s net capital also jumped by over 50%. Our final pool of contestants is beginning to take shape.
The following firms have net capital below $20 million
MB Trading $15,227,000
Easy Forex $15,544,000
GFS Forex $15,957,000
I Trade FX $16,088,000
Ikkon Royal $16,548,000
Alpari $19,690,000
Advanced Markets $19,873,000
The following firms have net capital above $20 million
Forex Club $22,409,000
PFG $26,005,000
CMS Forex $29,255,000
Interbank FX $39,945,000
FX Solutions $43,785,000
GFT Forex $76,055,000
FXCM $98,456,000
Gain Capital $107,390,000
Oanda $169,501,000
As always conduct your due diligence and make sure the firm you are trading with will be able to comply with the new $20 million capital requirement going into effect in the months ahead.
There is a third MT4 dealer...Forex.com which I did not realize falls under Gain Capital....So I guess Forex.com is an IB for Gain? What would be the regulations for IB's?
It is interesting that FXDD is not to be found...They are operating in the USA still?
ES
Quote:
Originally Posted by ElectricSavant
I just realized the the only two dealers w/MT4 in the USA on the approved saviors list is FXCM and IBFX...by the way FXCM does not offer Demo's with MT4.
ES
Last edited by ElectricSavant; 03-09-2009 at 05:38 PM.
have tried the demo platform and am planning to start fx trading in a small way but have heard that funds deposited with fx brokers arent always safe ie should he go bust so does my money???
guys... anyone suggest a good broker where this isnt a likelihood and my money is safe???
Disturbing news out of, where else; Switzerland, that the police have raided the offices of Swiss forex broker ACM for possible fraud. You’ll remember ACM fled the U.S. after they failed to come up with enough capital to stay in business. They are trying to get a banking license in Switzerland but to date only have an application pending with Swiss authorities. That application just got a lot more complicated.
A squad of 28 police officers raided the downtown Geneva offices of currency trading company ACM and seized documents, a computer and other evidence in a suspected financial fraud case. Swisster discovers the unprecedented affair, being directed by an inspector and detective for the cantonal force’s financial fraud brigade, may take weeks to unravel and has involved the questioning of top officials from the company, who are refusing to comment.
28 police officers?! Sounds like the raid that took place at the end of the movie Boiler Room where a swarm of agents falls upon Vin Diesel and company.
Quote:
In addition, senior officials were questioned by police, although Pulh said no-one has been arrested. A company employee told Swisster that a trader and four of the company’s senior management, including Nicholas Bang, deputy general manager and one of ACM’s founders, were contacted at their homes early Thursday and taken in for questioning.
“We are being told that it has to do with a client from two years ago based in Mexico who had lost a lot of money from the company,” the informant said. “The client was looking for documents to see if there was any misappropriation.”
On Thursday the 2nd of April, on the basis of counterfeit documents produced by a former client, the authorities in Geneva visited ACM’s offices.
Collaborating in a transparent and active way, ACM delivered all information required.
All elements prove ACM’s good faith and it remains clear that the company has fallen victim to a former client bent on malicious intent.
In return, ACM has lodged a complaint against this former client with accusations of blackmail, defamation and forgery of documents.
Another newspaper article that Francesc links to then goes on to explain that the Mexican plaintiff was tipped off by an ex-ACM employee about some bad pricing or something from the summer of 2008. ACM insists this rogue employee gave the Mexicans false statements which the plaintiff then used to blackmail ACM?
What a mess. Not sure who to believe here. But I can’t imagine that 28 police officers would storm a business, seize computers and files, and interrogate management- all on the hearsay of one disgruntled foreigner.
Stay tuned, we may have another Crown Forex on our hands.
I’ve said it before, I’ll say it again, do not trade with a Swiss broker UNLESS they have a banking license!
The following firms have net capital below $20 million
Easy Forex $15,267,000
MB Trading $15,449,000
GFS Forex $16,008,000
Ikkon Royal $16,310,000
I Trade FX $16,811,000
Alpari $19,563,000
Advanced Markets $19,779,000
The following firms have net capital above $20 million
Forex Club $21,536,000
PFG $26,053,000
CMS Forex $29,132,000
Interbank FX $37,816,000
FX Solutions $49,298,000
GFT Forex $84,505,000
FXCM $101,546,000
Gain Capital $105,049,000
Oanda $169,205,000
As always conduct your due diligence and make sure the firm you are trading with will be able to comply with the new $20 million capital requirement going into effect in the months ahead.
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