FXCM shut down (banned by CFTC from operating in the USA) | Reviews of Brokers and Data Feeds


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FXCM shut down (banned by CFTC from operating in the USA)

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tpredictor View Post
Below are the actual details-- sorry if already posted. It sounds like their counter parties, the other liquidity providers, may also have been impacted. It sounds like the conflict of interest became a problem when their HFT trader started "hanging" trades. But, it doesn't sound like that was on purpose. It sounds like the problem was due to how they were marketing. My analysis may be wrong but it sounds like if they had admitted the relationship then they may not have got in trouble. However, I'm not sure whether or not other liquidity providers knew they may not have been on a fair playing field either.

http://www.cftc.gov/idc/groups/public/@lrenforcementactions/documents/legalpleading/enfforexcapitalorder020617.pdf

Right, this is extremely dirty and I hope the other liquidity providers are not precluded from bringing forward a civil suit.

The other thing that's really dirty about this settlement is that the said affiliate of FXCM had made profits well in excess of the $7 million settlement by the 3rd year of its operation. (Its revenues were above the $100 million mark.)

Where's @nanex when you need him?

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