Proposed NFA Capital Requirement - page 34
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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.
BASIC Details
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.
BASIC Details
In 1988 the NFA settled a case with Multivest in which numerous salesmen were cited for fraud and high pressure sales tactics.
BASIC Case Summary
And then in 1990 the CFTC shut them down for good stating:
BASIC Case Summary
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.
BASIC Details
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:
The road to mini-success. (Online Trading). | Software Services & Applications (301) from AllBusiness.com
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%20receiver
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...
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:
Forex Forum - FXstreet.com - View Single Post - NFA Forex Dealer Dead Pool
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:
Forex Street Weblog: InterbankFX related to FXLQ?.... I do not think so
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...
BASIC Details
BASIC Case Summary
To our Valued Clients:
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. Forums - Any Recommendation for MT4 based Fx Broker
http://forexbastards.com/forum/inde...96&min=0&num=15
MoneyTec Traders Community Forum
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...
Updated Swiss Dealer Dead Pool
There is a great deal of uncertainty in the Swiss Forex Dealer community right now. There is no way of knowing which firms are here to stay and which firms are collecting coins in preparation for their crossing of the river Styx. I have emailed all the major Swiss firms to try and find out if each firm plans on getting a banking license. The responses (or lack thereof) have been quite illuminating.
As such I'm starting a Swiss Dealer Dead Pool to keep the trading public updated and informed about what is going on in Switzerland.
Firms that claim they are applying for a banking license
1) ACM
2) Fibo Group
3) Crown Forex
4) DukasCopy
5) MIGfx
Firms that are fleeing Swiss Regulation
1) Masterforex. Their business office is listed in Switzerland but they are registered in the Seychelles and have stated they do not need to get a banking license.
2) forex-swiss. FXCH, despite the fact they are NAMED "Forex Swiss" claim registration in Dominica. This is an odd company that has claimed multiple office addresses over the years including, Switzerland, Austria, South Africa, Iran, and the United States. Today they are claiming they have offices in Dominica and the United Kingdom. Tomorrow who knows, they could claim a mailing address in Tibet. Beware this firm.
3) Prime4X. Their head office is in Switzerland but they have stated they are applying for a license in Cyprus.
Firms that are no longer accepting customers or have been shutdown
1) WestCapFX
2) Tradex Swiss AG
3) Finex
4) Aleccohfx
Firms that refuse to comment
1) GFX Group (Forex.CH)
2) Swiss Direkt
3) Tadawulfx
4) Advised Trading
As always conduct your due diligence and make sure the firm you trade with is regulated and legit.
If I was a dealer looking to hire a a compliance officer I would make an offer to forexsavior ...I would make him an offer he could not refuse...I wish more companies had the brains and the quality to get get people such as this...my hat is off to you forexsavior and I wish you the best...this is incredible info..
ES
There is a great deal of uncertainty in the Swiss Forex Dealer community right now. There is no way of knowing which firms are here to stay and which firms are collecting coins in preparation for their crossing of the river Styx. I have emailed all the major Swiss firms to try and find out if each firm plans on getting a banking license. The responses (or lack thereof) have been quite illuminating.
As such I'm starting a Swiss Dealer Dead Pool to keep the trading public updated and informed about what is going on in Switzerland.
Firms that claim they are applying for a banking license
1) ACM
2) Fibo Group
3) Crown Forex
4) DukasCopy
5) MIGfx
Firms that are fleeing Swiss Regulation
1) Masterforex. Their business office is listed in Switzerland but they are registered in the Seychelles and have stated they do not need to get a banking license.
2) forex-swiss. FXCH, despite the fact they are NAMED "Forex Swiss" claim registration in Dominica. This is an odd company that has claimed multiple office addresses over the years including, Switzerland, Austria, South Africa, Iran, and the United States. Today they are claiming they have offices in Dominica and the United Kingdom. Tomorrow who knows, they could claim a mailing address in Tibet. Beware this firm.
3) Prime4X. Their head office is in Switzerland but they have stated they are applying for a license in Cyprus.
Firms that are no longer accepting customers or have been shutdown
1) WestCapFX
2) Tradex Swiss AG
3) Finex
4) Aleccohfx
Firms that refuse to comment
1) GFX Group (Forex.CH)
2) Swiss Direkt
3) Tadawulfx
4) Advised Trading
As always conduct your due diligence and make sure the firm you trade with is regulated and legit.Thanks Forexsavior
Thanks Forexsavior, your posts are very valuable.
I am especially keen about your posts as I am looking for another MT4 based broker. I have been looking at Crown Forex for a while because their usd pairs are 1 pip spread. Crosses are not that tight, but I don't trade them often.
Knowing that Crown is applying for a banking license is a very good sign. I am currently using InterbankFX but the 1 pip spread on majors is very very appealing.
Knowing that Crown is applying for a banking license is a very good sign. I am currently using InterbankFX but the 1 pip spread on majors is very very appealing.
You should do some search about them before you open a real account. It seems that real accounts are not working as smooth as the demo...
Edit: Sorry forexsaviaor, I did not want to disturb your inapreciable thread. Your work is great ! Thanks a lot !
I have been looking at Crown Forex for a while because their usd pairs are 1 pip spread.
Crap execution.
Thanks for the Comments
Appreciate the feedback. I'll keep updating information on the Swiss market as it becomes available.
Metatrader Misery
After getting a series of tips from disgruntled traders I'm going to follow up on a couple unregulated forex brokers next week dabbling in the treacherous MT4 arena. Masterforex, PoltekFX and FX Open are involved in a brutal slugfest that has spilled over into numerous bulletin boards. Who are these firms and what are they up to? Details to follow next week.
Crap execution.
The broker uses fractional pips that can cause annoying requotes. If you change the "enable maximum deviation" feature to something like 10 (which is actually 1 pip) it becomes sewing machine smooth.