NexusFi: Find Your Edge


Home Menu

 





PFGBest Accounts Frozen (PFG scandal big thread)


Discussion in Brokers

Updated
      Top Posters
    1. looks_one Big Mike with 94 posts (100 thanks)
    2. looks_two olobay with 91 posts (76 thanks)
    3. looks_3 nakachalet with 73 posts (22 thanks)
    4. looks_4 ThatManFromTexas with 57 posts (54 thanks)
      Best Posters
    1. looks_one djkiwi with 1.7 thanks per post
    2. looks_two Big Mike with 1.1 thanks per post
    3. looks_3 ThatManFromTexas with 0.9 thanks per post
    4. looks_4 olobay with 0.8 thanks per post
    1. trending_up 260,894 views
    2. thumb_up 588 thanks given
    3. group 66 followers
    1. forum 859 posts
    2. attach_file 81 attachments




 
Search this Thread

PFGBest Accounts Frozen (PFG scandal big thread)

  #321 (permalink)
 
Big Mike's Avatar
 Big Mike 
Manta, Ecuador
Site Administrator
Developer
Swing Trader
 
Experience: Advanced
Platform: Custom solution
Broker: IBKR
Trading: Stocks & Futures
Frequency: Every few days
Duration: Weeks
Posts: 50,396 since Jun 2009
Thanks Given: 33,172
Thanks Received: 101,535


Big Mike View Post
Just need to email the CFO and get it in writing.

Mike

I have sent an email to the CFO, and if I get a response I will share it here.

Mike

We're here to help: just ask the community or contact our Help Desk

Quick Links: Change your Username or Register as a Vendor
Searching for trading reviews? Review this list
Lifetime Elite Membership: Sign-up for only $149 USD
Exclusive money saving offers from our Site Sponsors: Browse Offers
Report problems with the site: Using the NexusFi changelog thread
Follow me on Twitter Visit my NexusFi Trade Journal Reply With Quote

Can you help answer these questions
from other members on NexusFi?
Deepmoney LLM
Elite Quantitative GenAI/LLM
My NT8 Volume Profile Split by Asian/Euro/Open
NinjaTrader
New Micros: Ultra 10-Year & Ultra T-Bond -- Live Now
Treasury Notes and Bonds
NexusFi Journal Challenge - April 2024
Feedback and Announcements
Better Renko Gaps
The Elite Circle
 
Best Threads (Most Thanked)
in the last 7 days on NexusFi
Get funded firms 2023/2024 - Any recommendations or word …
61 thanks
Funded Trader platforms
39 thanks
NexusFi site changelog and issues/problem reporting
26 thanks
Battlestations: Show us your trading desks!
24 thanks
The Program
18 thanks
  #322 (permalink)
 traderwerks   is a Vendor
 
Posts: 692 since Jun 2009
Thanks Given: 436
Thanks Received: 465


Big Mike View Post
Except the title of the page is "Safety of funds for Futures Traders". Just need to email the CFO and get it in writing.

Mike

Yes it does.

I guess I am just too cynical when it comes to brokers.

I hope the email to the CFO can clear this up.

Math. A gateway drug to reality.
Reply With Quote
  #323 (permalink)
 
ThatManFromTexas's Avatar
 ThatManFromTexas 
Houston,Tx
 
Experience: Advanced
Platform: NinjaTrader
Broker: Mirus Futures/Zen-Fire
Trading: TF
Posts: 2,265 since Feb 2010
Thanks Given: 1,206
Thanks Received: 4,348



karoshiman View Post
They talk about "loss of securities and/or cash" and not only "securities". And the margin in your futures account is essentially cash.

They have some further info on this site about safety of funds:

Safety of Funds for Futures Traders | TradeStation

There they state:

Your TradeStation equities accounts are further protected with SIPC insurance. SIPC insures your equities accounts up to $500,000, including $250,000 for cash. Beyond this, TradeStation has arranged for additional protection through Lloyd's of London, insuring all accounts up to an aggregate limit of $300 million.

This together with the statements by the TS reps (whether they understand the situation or not), would make it difficult for them to argue differently in case of a law suit (which hopefully will never happen). They've made their customers believe, that there is protection for futures accounts as well (up to the amount described above).

Though I see the points of TMFT and there might be a risk with Lloyd's as well, my concern is more about the conditions of the excess insurance, i.e. the cases which are covered by this excess insurance (bankruptcy, fraud, etc.?). I've sent them an email 2 days ago and asked about it and got the link above from them. Unfortunately, there they don't answer this question so I've sent them my question again, stating that this question is not answered on that page. See, what they will come up with...

By the way, that "safety of funds" page includes a lot of blah blah about regulation, separate accounts etc. which we know now does not mean anything. But, what I like is the fact that they are not involved in proprietary trading. This is one risk aspect less ...


traderwerks View Post
I read the safety of funds page, and I don't see the same thing you see.

It says "Securities accounts" and "equities accounts".

It seems pretty clear to me that they are not talking about futures accounts. It does not matter if it is cash or not, it is the type of account.

I agrees with @ThatManFromTexas and @djkiwi

The customer service reps can say whatever they want, the courts will go with what is written on the contract you signed when you opened the account.




Securities accounts - Held at TradeStation Securities, Inc.

Brokerage firms are required to follow certain rules that are designed to minimize the chances of financial failure and, more importantly, to protect customer assets if they do fail. For example, the SEC's Rule 15c3-1 — the "Net Capital Rule"— requires brokerage firms lo maintain certain levels of their own liquid assets. The minimum net capital a firm must have on hand depends on its size and business. As of December 31, 2011, TradeStation Securities, Inc. had net capital of approximately $54.7 million, which was approximately $52.2 million in excess of its required net capital of approximately $2.5 million.
In addition, the SEC's Rule 15c3-3 — the "Customer Protection Rule" — requires brokerage firms that have custody of customer assets to keep those assets separate from their own accounts. In other words, customers' cash must be placed in a special, separate "reserve" account; and fully paid customer securities must be kept separate from firm and customer margin securities. As of December 31, 2011, TradeStation Securities, Inc. had approximately $1.02 billion of customer funds reserved and segregated in bank accounts clearly identified as customer funds in accordance with Rule 15c3-3. The amount required to be segregated is computed every week and any shortage needs to be deposited before 10:00 a.m. of the following business day. As an additional safety, TradeStation maintains approximately $10 million in excess of the required amount to be segregated from its own proprietary funds.

Your TradeStation equities accounts are further protected with SIPC insurance. SIPC insures your equities accounts up to $500,000, including $250,000 for cash. Beyond this, TradeStation has arranged for additional protection through Lloyd's of London, insuring all accounts up to an aggregate limit of $300 million. For more information on SIPC coverage, we encourage you to visit the SIPC website.

Everything in the above section refers to equities.

Everything in the below section refers to Futures.


Futures accounts - Held at TradeStation Securities, Inc

TradeStation Securities Inc., as a Futures Commission Merchant (FCM) that carries customer accounts, is subject to the Customer Protection Rule requirements of the Commodity Futures Trading Commission (CFTC) Rules 1.20 and 30.7. These rules state that the company is required to maintain enough cash and cash equivalents in special reserve accounts, and identified as such, to cover at all times the required segregation reserve amounts. The reserve requirement must be calculated daily and filed electronically through the National Futures Association's (NFA) web based WinJammer system. Additionally, the company must also properly segregate these funds from any other proprietary bank account of the company. As of December 31,2011 TradeStation had $451.3 million segregated in accordance with the above CFTC requirements.


Let's hope no Tradestation customer has to find out the hard way

I'm just a simple man trading a simple plan.

My daddy always said, "Every day above ground is a good day!"
Reply With Quote
  #324 (permalink)
karoshiman
Munich, Germany
 
Posts: 285 since Apr 2012
Thanks Given: 121
Thanks Received: 117


ThatManFromTexas View Post

...


Yes, I am not 100% happy with the phrasing as well as it obviously leaves room for interpretation as one can see from this discussion here.

Mike's idea with the CFO is great.

I've sent the following message to client services and posted this also in the aforementioned TS community thread which I've started over there:

Hi,

Contacted client services and received a link to that website:

Safety of Funds for Futures Traders | TradeStation

However, on that site as well as in the aforementioned paragraph which I've quoted initially from your website regarding Account Security, it is not clearly phrased that "futures accounts" are covered by that excess SIPC insurance as well.

Given the current situation in the futures industry, it should be of high interest for TradeStation's future/futures business, to be clear in this regard or otherwise one can only suspect that futures accounts are not secure at TradeStation.

Hence, I suggest to change such official statement and include a sentence that explicitly states that futures accounts are protected by the excess SIPC insurance, i.e. mention the words "futures account" in that sentence and do not use any wishy-washy phrasing which leave room for interpretation.

Regards,
k

Reply With Quote
  #325 (permalink)
 kevinkdog   is a Vendor
 
Posts: 3,645 since Jul 2012
Thanks Given: 1,890
Thanks Received: 7,338


ThatManFromTexas View Post
Securities accounts - Held at TradeStation Securities, Inc.

Brokerage firms are required to follow certain rules that are designed to minimize the chances of financial failure and, more importantly, to protect customer assets if they do fail. For example, the SEC's Rule 15c3-1 — the "Net Capital Rule"— requires brokerage firms lo maintain certain levels of their own liquid assets. The minimum net capital a firm must have on hand depends on its size and business. As of December 31, 2011, TradeStation Securities, Inc. had net capital of approximately $54.7 million, which was approximately $52.2 million in excess of its required net capital of approximately $2.5 million.
In addition, the SEC's Rule 15c3-3 — the "Customer Protection Rule" — requires brokerage firms that have custody of customer assets to keep those assets separate from their own accounts. In other words, customers' cash must be placed in a special, separate "reserve" account; and fully paid customer securities must be kept separate from firm and customer margin securities. As of December 31, 2011, TradeStation Securities, Inc. had approximately $1.02 billion of customer funds reserved and segregated in bank accounts clearly identified as customer funds in accordance with Rule 15c3-3. The amount required to be segregated is computed every week and any shortage needs to be deposited before 10:00 a.m. of the following business day. As an additional safety, TradeStation maintains approximately $10 million in excess of the required amount to be segregated from its own proprietary funds.

Your TradeStation equities accounts are further protected with SIPC insurance. SIPC insures your equities accounts up to $500,000, including $250,000 for cash. Beyond this, TradeStation has arranged for additional protection through Lloyd's of London, insuring all accounts up to an aggregate limit of $300 million. For more information on SIPC coverage, we encourage you to visit the SIPC website.

Everything in the above section refers to equities.

Everything in the below section refers to Futures.


Futures accounts - Held at TradeStation Securities, Inc

TradeStation Securities Inc., as a Futures Commission Merchant (FCM) that carries customer accounts, is subject to the Customer Protection Rule requirements of the Commodity Futures Trading Commission (CFTC) Rules 1.20 and 30.7. These rules state that the company is required to maintain enough cash and cash equivalents in special reserve accounts, and identified as such, to cover at all times the required segregation reserve amounts. The reserve requirement must be calculated daily and filed electronically through the National Futures Association's (NFA) web based WinJammer system. Additionally, the company must also properly segregate these funds from any other proprietary bank account of the company. As of December 31,2011 TradeStation had $451.3 million segregated in accordance with the above CFTC requirements.


Let's hope no Tradestation customer has to find out the hard way


Thanks for the great discussion, everyone.


I wonder what Lloyds of London believe they are insuring?

Tradestation Customer Service and even the CFO (if Mike gets a response) might believe one thing, but as anyone who has ever dealt with an insurance company knows, what a policyholder believes/thinks is never the same as what a policywriter believes/thinks!

Follow me on Twitter Reply With Quote
Thanked by:
  #326 (permalink)
 itrade2win 
New York
 
Experience: Intermediate
Platform: Sierra Charts, TOS
Trading: E-mini S&P 500
Posts: 751 since Aug 2010
Thanks Given: 447
Thanks Received: 437


kevinkdog View Post
Thanks for the great discussion, everyone.


I wonder what Lloyds of London believe they are insuring?

Tradestation Customer Service and even the CFO (if Mike gets a response) might believe one thing, but as anyone who has ever dealt with an insurance company knows, what a policyholder believes/thinks is never the same as what a policywriter believes/thinks!

Kevindog is right about that. I worked for John Hancock and Prudential back in the 80's and 90's and you would have no idea how many claims were escalated because of misunderstandings of all types of policies from auto, life and annuities.

Reply With Quote
  #327 (permalink)
karoshiman
Munich, Germany
 
Posts: 285 since Apr 2012
Thanks Given: 121
Thanks Received: 117


kevinkdog View Post
Thanks for the great discussion, everyone.


I wonder what Lloyds of London believe they are insuring?

Tradestation Customer Service and even the CFO (if Mike gets a response) might believe one thing, but as anyone who has ever dealt with an insurance company knows, what a policyholder believes/thinks is never the same as what a policywriter believes/thinks!


Drat! There is another risk...

Reply With Quote
  #328 (permalink)
 
ThatManFromTexas's Avatar
 ThatManFromTexas 
Houston,Tx
 
Experience: Advanced
Platform: NinjaTrader
Broker: Mirus Futures/Zen-Fire
Trading: TF
Posts: 2,265 since Feb 2010
Thanks Given: 1,206
Thanks Received: 4,348


kevinkdog View Post
Thanks for the great discussion, everyone.


I wonder what Lloyds of London believe they are insuring?

Tradestation Customer Service and even the CFO (if Mike gets a response) might believe one thing, but as anyone who has ever dealt with an insurance company knows, what a policyholder believes/thinks is never the same as what a policywriter believes/thinks!


itrade2win View Post
Kevindog is right about that. I worked for John Hancock and Prudential back in the 80's and 90's and you would have no idea how many claims were escalated because of misunderstandings of all types of policies from auto, life and annuities.


karoshiman View Post
Drat! There is another risk...

Come on guys... you have enough real issues to worry about without inventing stuff ....

As my daddy always said, "No sense borrowing trouble"

I'm just a simple man trading a simple plan.

My daddy always said, "Every day above ground is a good day!"
Reply With Quote
  #329 (permalink)
karoshiman
Munich, Germany
 
Posts: 285 since Apr 2012
Thanks Given: 121
Thanks Received: 117


ThatManFromTexas View Post
Come on guys... you have enough real issues to worry about without inventing stuff ....

As my daddy always said, "No sense borrowing trouble"


Hey, didn't you come up with the topic, that Lloyd's itself is a risk?

Reply With Quote
  #330 (permalink)
 kevinkdog   is a Vendor
 
Posts: 3,645 since Jul 2012
Thanks Given: 1,890
Thanks Received: 7,338



ThatManFromTexas View Post
Come on guys... you have enough real issues to worry about without inventing stuff ....

As my daddy always said, "No sense borrowing trouble"


I'm confused. You brought up 5 issues with the Lloyd's policy in the first place...

Follow me on Twitter Reply With Quote




Last Updated on April 6, 2016


© 2024 NexusFi™, s.a., All Rights Reserved.
Av Ricardo J. Alfaro, Century Tower, Panama City, Panama, Ph: +507 833-9432 (Panama and Intl), +1 888-312-3001 (USA and Canada)
All information is for educational use only and is not investment advice. There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
About Us - Contact Us - Site Rules, Acceptable Use, and Terms and Conditions - Privacy Policy - Downloads - Top
no new posts