Not a good day to a be a FX dealer. For years many brokers have used the STP or ECN monikers to advertise their superior business models. Without some extensive data analysis / dedicated software, most of us retailer traders couldn't tell the difference.
Don't know if this law firm has done their homework; I hope they did, but it will be interesting to see how these two cases turn out. It's one thing change them with dirty tricks, but racketeering is a whole another level of criminality. I do know this, where ever you have large amounts of money flowing in an industry, expect fraud. The larger the $ amount, the greater the fraud.
I'm not a forex guy. I understand ECN, but what is STP?
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The Plaintiff, William H. Sanders, of Muskogee, Oklahoma, brought the action on behalf of himself and all other similarly situated FXCM customers, accusing FXCM of fraud by misrepresenting itself as a trading platform that is free from dealer intervention or manipulation. Instead, Sanders alleges, FXCM uses a number of devices and tricks, including software applications, designed specifically to interfere with customers’ trades.
The Complaint further alleges that FXCM engaged in a pattern of racketeering activity by collaborating with its software developers and programmers to develop a “diabolical” software application that provides FXCM with a myriad of tools and system commands with which to interfere with customers’ trades, including routing trades to “slow” servers and sending false “error” messages when customers attempt to close out profitable trades.
Finally, Sanders alleges in the Complaint that FXCM lured thousands of customers to its trading platform by promoting a “demo account”, which was touted as providing customers with a true market trading experience. Instead, he claims, once “live” trading commences, FXCM deploys specially designed software to manipulate customers’ trades.
1. Sounds like a guy that blew up his account and now wants his money back.
2. How does he know about this diabolical software , does he have any evidence other than his losses? (on the other hand I think Big Mike has developed a diabolical software program that makes my posts look silly and uninteresting... cause it ain't my fault .. I be a gooder poster for sure... )
I don't have an account with FXCM but this smells like a "shakedown" to me.
I'm just a simple man trading a simple plan.
My daddy always said, "Every day above ground is a good day!"
Yeah, it could very well be a shake down. We had a law firm try to shake down my former employer (not trading related). I helped one of our engineers send out some samples to an outside lab. Once I got the test results back, we told the law firm to sit on it and spin Never heard from them again.
The VD (Virtual Dealer) software is well known to many of us as well as the NFA. The author of the software lists several high profile brokers/banks as clients on their website Boston Technologies - Bridges This doesn't mean all of them are using it, but I don't think a business link wouldn't be too difficult to establish. I'm sure some others have developed their own (in-house) software, but this might be a little harder to detect/prove.
The way the allegations read, it does sound like they might have obtained depositions from some credible witnesses, but I'm just speculating here. We'll have to wait to see.
Also, let's keep in mind, we don't necessarily have to have one innocent victim and one evil perp. Could very well be the traders don't have a clue how to trade, and would've lost their money anyway. But, it could also be true that their respective brokers were screwing with them. Frankly, the industry has little integrity on both sides of the fence.
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