I hear a rumour that the same law firm were involved in the Gain Capital/forex.com case which also dealt with dishonest slippage practices. If that's the case you can be certain they'll investigate every other forex broker as well. Much as I detest them as a breed of people I'd have to say good luck to them on this occasion.
NFA levies $2,000,000 monetary sanction against FXCM and orders refunds to customers
Re: FXCM Response
Got to love that explanation above, it's as if it was a little mistake, something that got overlooked etc.
How about this for what probably happened -
"The company worked out that if the client didn't know of a price improvement it could pocket the money as a risk-free profit. Sadly, it was only after some of our more troublesome clients reported us to the authorities for investigation that the company was reluctantly forced to close this very profitable (and risk-free) source of income, and was also forced to give our clients what was rightfully theirs in the first place."
But take no notice of the fine everyone, instead why not focus on that fact that we're a multi-multi-multi-multi award winning company
Got to love that explanation above, it's as if it was a little mistake, something that got overlooked etc.
How about this for what probably happened -
"The company worked out that if the client didn't know of a price improvement it could pocket the money as a risk-free profit. Sadly, it was only after some of our more troublesome clients reported us to the authorities for investigation that the company was reluctantly forced to close this very profitable (and risk-free) source of income, and was also forced to give our clients what was rightfully theirs in the first place."
But take no notice of the fine everyone, instead why not focus on that fact that we're a multi-multi-multi-multi award winning company
Has the class action lawsuit against FXCM reached the courts yet?
http://forexmagnates.com/fxcm-slapp...n-suit-over-claims-of-fraud-and-racketeering/
http://forexmagnates.com/fxcm-slapp...n-suit-over-claims-of-fraud-and-racketeering/
the hare
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I think T2W should clarify the basis for this award. Its possible that T2W included a question about preferred brokers on one of their annual questionaire things, and if the few T2W members who actually voted decided that FXCM was their particular broker of choice, you can hardly blame T2W for the award, the fault lies very firmly with the members who voted for them (although I cant believe anyone who ever traded with FXCM would be quite so stupid to reccommend them, but there's nowt as queer as folk).
The problem of course is the lack of transparency in these annual awards. Forex Factory for example just made their voting completely transparent, and this of course revealed that the people who are actually voting for various products and services where in the main not the sites rank and file membership, but vendors and paid shrills.
Its therefore entirely possible that the award was won on the basis that FXCM's marketing department had the good sense to create a few multi nics and vote for themselves (if so well done, alls fair in this game).
On the other hand, maybe the award was given simply as a thank you for advertising. My own previous business has in the past picked up many awards from a number of national magazines purely due to our advertising spend, its a very common occurence and most magazines are completly blatent about it.
I suspect T2W wont comment
Pazienza
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I've never understood why people pay any attention to these ridiculous awards.
If someone gets a Purple Heart or a VC, then pay attention because they did something remarkable to earn it.
If Asda wins the "Asda Award for the Best Supermarket Called Asda", beating off stiff but ultimately unsuccessful competition from Tesco and Sainsbury's, treat it with the contempt it deserves.
If someone gets a Purple Heart or a VC, then pay attention because they did something remarkable to earn it.
If Asda wins the "Asda Award for the Best Supermarket Called Asda", beating off stiff but ultimately unsuccessful competition from Tesco and Sainsbury's, treat it with the contempt it deserves.
I dont think that's the same as the members award (which they won in 2004), I think its just a case of them paying for it or providing some other reimbursement. You're right about it being common practice in the magazine industry.
johnnyb1985
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Is this practise common among Forex brokers? I have a FXCM demo acct and get calls every week asking me to fund the acct. Thought about using Sink or Swim but heard while they were good for equities, but not so good for Forex.
Re: FXCM Response
That's by order, but what's the actual real money terms of the slippage. Negative slippage would more likely be like 3 pips per order and positive slippage 0.2 pips per order. I guess that's always the way though. This seems stupid to me. I'm pretty sure every broker including spreadbetting firms are doing the same. Why would FXCM get fined for not passing on positive slippage? 99% of my trades with a spreadbetting firm don't receive positive slippage, even when the market gaps 20 ticks through my limit. As far as i know that price did trade but only between me and the spreadbetting company.
Hi SpecTrade,
Yesterday's action from the NFA primarily concerns positive slippage, and I would like to shed more light on how positive slippage with FXCM's NDD forex execution system used to work prior to August 2010 and how it has worked since then.
FXCM’s platforms display the best bid/ask spread streamed from the firm’s liquidity providers plus FXCM’s mark-up. Every FXCM NDD forex trade is automatically offset in a two-step process, designed to ensure that FXCM does not profit from a trader’s losses. In the first step of the execution process, a trader clicks on the price and the order is sent to FXCM. In the second step, FXCM automatically sends the client’s order to one of its liquidity providers to offset the trade.
I gather FXCM got into trouble because of how they advertised the platform and execution.
FXCM’s execution system prior to August 2010 only offered price improvements to clients in the first step of the process. If a better price became available on FXCM’s platform in the fraction of a second after the client submitted the order but before the order was received by FXCM, the client would benefit from the price improvement. However, FXCM’s previous execution system did not provide clients with price improvements in the second step of the execution process, even if FXCM was able to offset the order at a better price, excluding FXCM’s markup. FXCM enhanced the execution system in 2010 so that clients now benefit from price improvements in both steps of a transaction for all order types.
It is important to note: By the end of 2010 FXCM enhanced its execution system to offer price improvements on all trades. You may remember from my forum posts last August that I announced positive slippage for limit and limit entry orders on this thread. All orders now eligible to receive positive slippage, and all price improvements are subject to available liquidity.
The settlement amount and the client price improvement credit will have no negative impact on FXCM's financial balance sheet because several founding partners of FXCM have reimbursed the company for the credit and the fines. As of June 30, 2011, FXCM Inc. had over $200 million in cash and no debt.
FXCM's goal is to have a fair and transparent system, and we are proud to offer an execution system that passes on any price improvements. FXCM has compiled statistics from July 1, 2010 until now to display the percentage of orders positive slipped and negatively slipped, and which orders most frequently experience each. The percentage of orders between positive and negative slippage has been roughly equal.
And we have broken this down even further to display the number of orders on a monthly basis positively and negatively slipped:
Limit and limit entry orders are the most likely to experience positive slippage which is why we highlight using limit and limit entry orders in the execution center on our website. You can find even more data on slippage broken down per order type in the complete report here: Slippage Statistics
Please let me know if you have any additional questions. I will do my best to answer them as thoroughly as possible.
Jason
FXCM
That's by order, but what's the actual real money terms of the slippage. Negative slippage would more likely be like 3 pips per order and positive slippage 0.2 pips per order. I guess that's always the way though. This seems stupid to me. I'm pretty sure every broker including spreadbetting firms are doing the same. Why would FXCM get fined for not passing on positive slippage? 99% of my trades with a spreadbetting firm don't receive positive slippage, even when the market gaps 20 ticks through my limit. As far as i know that price did trade but only between me and the spreadbetting company.
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Re: FXCM Response
I'm sure the rest of them are doing it, in fact some others have been fined already. Obviously what they were doing was against the NFAs rules hence the heavy fine. If you go to the first post you'll see the link to the judgment.
I'm sure the rest of them are doing it, in fact some others have been fined already. Obviously what they were doing was against the NFAs rules hence the heavy fine. If you go to the first post you'll see the link to the judgment.
Shakone
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The punishment doesn't seem enough. Who knows how many millions they've made off the back of ripping off their own customers. Is a 2million fine really going to affect them or just a slap on the wrist?
The punishment should be putting companies like this out of business.
The punishment should be putting companies like this out of business.
I think they were proven to have made 600k from this practice. Of course they may have made more but that's what was proven. I agree the penalty isn't high enough but at least they are investigating these things now. For years it was a free for all, those days are over and with the increased awareness each of these cases brings it's more likely that people will file complaints in future.
B
Black Swan
Not so sure, I reckon it's a killer for their reputation, surely that's a bigger hit than even the 2ml which won't be easy to find. This news will hit hard, the class action could be murderous..not good.
scose-no-doubt
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You were forever talking up FXCM a few months ago?
Did they desist your monthly retainer or something?
I bet you blew you whistle now you're greasing up CMCs shaft.
Its inconceivable that others weren't doing the same thing, I suppose when they all get caught it will even things up a bit and FXCM wont look so bad.
By the way I see there was another fine, it relates specifically to FXCM UK. They were fined $140,000 recently.
http://trading-gurus.com/fxcm-uk-fined-140000-by-the-cftc/
scose-no-doubt
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Why's everyone giving Barjon a hard time? He's only a mod and he's already said he's leaving the thread.
All this hostility is misguided. You guys need to take on
El Sharky
or have you not got the stones for it?
All this hostility is misguided. You guys need to take on
El Sharky
or have you not got the stones for it?
the hare
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Its probably more appropriate to ask Tim the same question......
