Any plans to reconsider the relationship between C2, BulldogFX and FXCM?
Not that we didn’t already know this …
http://www.msnbc.msn.com/id/41508053/ns/business-press_releases/
Morgan Business Trial Group Files Class Action Lawsuit Against Nation’s Largest Forex Dealer – FXCM
updated 2/10/2011 7:16:44 AM ET
ORLANDO, Fla., Feb. 10, 2011 (GLOBE NEWSWIRE)
(Press release paid for by lawyers in order to drum up plaintiffs has been removed by System Admin)
I can’t comment on the merits of this particular class action suit.
I can only say, as an entrepreneur, that most class action suits I have seen are without merit, and almost all are manufactured by trial lawyers whose sole function is to extract money from the productive members of society and redistribute it to lawyers.
Surely you must know that most class actions are not brought by real individual plaintiffs, but rather are created by lawyers, who typically “invent” the lawsuit out of thin air, and then go out and search for plaintiffs who will be willing to bring suit. In many cases lawyers already have a set of “plaintiffs” on their payroll, posing as customers or shareholders of deep-pocketed firms, waiting for the appropriate moment to strike. (FXCM just went public, of course. And so the lawyers chose this moment to strike.) The lawyers hope knuckledheads like you read their press releases, and join in on the action. Everyone who joins means more money for the lawyers who run the suit.
The dirty little secret is that most of the blackmail money paid by firms like FXCM (if they indeed wind up paying it) goes straight into the lawyers’ pockets - not the Average Joe plaintiff’s. The Average Joe Plaintiff (if there even is one – I tend to think most are dupes of the lawyers or morally-obtuse people looking for a payday) winds up with almost nothing.
By quoting their press release, you serve only to further the interests of these morally bankrupt people. Their efforts – despite all their highfalutin self-congratulation about how they protect the little guy – only raise the costs most consumers pay for their goods and services, and discourage entrepreneurs from even bothering to innovate.
I will edit your post to remove the full text of the lawyer’s press release. I will leave the URL in place and people who are interested can go look for themselves. I hope people will do the right thing and ignore what I suspect is garbage.
Matthew
Even though FXCM is not my only forex broker (I use two FX brokers in case one of my broker’s server is down), personally I have never noticed anything unusual about FXCM trading platform, all my positions (profitable or not) are opened and closed in strict accordance with the orders I send to the platform, to the pip. Sometimes I even get a nice positive slippage on some of my limit orders.
During the last 4 years I had to call their customer service only once because a withdrawal I made from my account got lost in the mail and never made it to my mailbox. They quickly sent me another check without hesitation. That was the only “problem” I had with FXCM so quite frankly I really don’t understand what this frivolous lawsuit is all about.
Just to balance your opinion:
I used to trade forex systems which enter trades by way of stop orders. My broker for stock and forex systems is IB. It has happened on several occasions that C2 showed a trade entry by way of stop order for such forex systems, apparently reflecting the executions of the Gen3 forex brokers, resulting in substantial losses whereas in my IB account (IB uses interbank quotes) the stop was never triggered because the real interbank price never hit the stop. This to me indicated that the "bucket shop" forex brokers manipulated the price in order to trade against their customers and profit at the expense of their clients.
Karl, first of all it is almost impossible to find two forex brokers with the same price feed, but that does not necessarily mean they are up to get you.
Let me give you an example : On Monday you place two identical limits orders on two different Forex platforms. A few minutes later Forex Platform A triggers your limit order (resulting in a huge loss for you) while Forex platform B never executes that same limit order because again each platform delivers slightly different prices. You slam the computer and yell "Forex broker A is a crook, because of him I lost big time, I will call these bastards and get my money back!"
But here is the point: After this "incident", the vast majority of traders will never say "Hey, Forex broker B is a very honest broker, his platform just "saved" me tons of money!".
See, traders never remember the "good" days, those days when their trading platform "saved" them a lot of money by NOT opening a losing position. Like they never remember the "good" days when the price on their platform came 1 pip near the stop level only to reverse its course and move 300 pips in their favor later during the day. No, they only remember the "losing" days, when the price moved against their position because their platform was allegedly "rigged". As traders, we all have to deal with this powerful psychological illusion on a daily basis, because it is human nature to blame someone or something else for our problems,
Secondly, since you are mentioning IB, keep in mind that any forex broker can claim that his price is the "real" interbank price, but unless you can physically inspect his servers, software and the exact origin of his price data feed, you really have no way of knowing for sure, period.
Matthew,
Thanks for bringing intelligence into this post immediately. William Sanders complaint sounds like another bitter retail trader who entered the Forex market dreaming of riches and got burnt. It could not be his fault, it must be the broker!
His complaint is absolute crap in my opinion. FXCM is one of our brokers and we have been an institutional client for over 3 years. Our platforms are integrated with theirs and we run multiple live accounts, and demo accounts for training at the same time and there is no difference at all. They have never interfered with any of our trades.
Good luck Sanders.
Stephen, what is really peculiar about this case is that, according to official court documents freely available on the internet, this Williams Sanders had been trading on the FXCM forex trading platform from 2004 to 2008 ! And now (at least 3 long years later) ! he wants to sue, just when FXCM is going public.
Like Matthew said, it is a good time indeed for those greedy trial lawyers!
Also, look at the FXCM stock price the last few days, I guess a few Gordon Gekko were busy shorting the stock ahead of the "bad" news, even though the stock gained almost 14% on the New York Stock Exchange today, February 15, 2011.
Igor, maybe he was just wanting to make double sure that the suspicious activity was really happening. 3 years of putting up with order manipulation and platform errors should do it. I’m going to look into this trial lawyer gig though, looks like good money. Should be able to buy a degree online for it.
I heard Gordon was out, maybe he is behind it?
Like they say on TV : "But wait, there is more!", now this same group has filed another class action lawsuit against another forex broker, this time it is FXDD, google for FXDD lawsuit.
For Immediate Release
August 12, 2011
For more information contact:
Larry Dyekman (312) 781-1372, ldyekman@nfa.futures.org
Karen Wuertz (312) 781-1335, kwuertz@nfa.futures.org
NFA levies $2,000,000 monetary sanction against FXCM and orders refunds to customers
August 12, Chicago - National Futures Association (NFA) has issued a Decision imposing a $2,000,000 monetary sanction against Forex Capital Markets LLC (FXCM) in settlement of a Complaint issued by NFA’s Business Conduct Committee on August 12, 2011. The Complaint cited FXCM for retaining gains derived from asymmetrical positive price slippage; failing to adopt or carry out adequate procedures to ensure the efficient execution of all customer orders; failing to treat all customers equally when giving price adjustments; failing to adequately investigate suspicious activity in several customers’ accounts; and - together with its principal Dror Niv - failing to supervise. FXCM is a Futures Commission Merchant, Retail Foreign Exchange Dealer, and Forex Dealer Member located in New York, New York.
In addition to the $2,000,000 monetary sanction, FXCM must credit the accounts of its customers the amount of asymmetrical positive slippage which its customers experienced on their trades from and after June 18, 2008 and provide verification to NFA of these credits. In the future, FXCM is prohibited from engaging in price slippage or margin liquidation practices, as described in the Complaint. FXCM must also enhance existing procedures to ensure efficient execution of customer orders and compliance with NFA’s anti-money laundering requirements.
The complete text of the Complaint and Decision can be found on NFA’s website (NFA - National Futures Association).
NFA is the premier independent provider of innovative and efficient regulatory programs that safeguard the integrity of the futures markets.
The merrits I think have more to do with the market FXCM is in. This should include a review of their most recent commercial where they claim they don’t do this.
It’s an industry wide issue at every broker except IB in my opinion. Forex bucket shops that only deal forex are all I see when I think about brokers who only do this.
Dennis,
Great job in digging up this old thresd and updating it with timely information.
Karl
