I have seen several educational trading groups, Bulls on Wall Street, FousAlerts, LiveTraders.net offer access to trade in their "Hedge Fund". No Series 7/56 required, less than $5k up front, with a profit split. Not sure if they are marking up commissions. Is is a matter of time before they are shut down, or is this a different structure than registered prop firms like T3?
The "Bulls On Wall Street" has savvy marketing, that's for sure. However, my guess is there is some type of education/course required, and that is where they make their up front money. It's very doubtful that a hedge fund is simply going to hand anyone "up to $250k" without a live performance track record. Regarding the mark up of commissions, my understanding is only broker/dealers can mark up commissions, so I'm not sure how LiveTraders can accept capital without traders being registered with an exchange.
It is possible to run an entity legally and take capital from traders, as long as they don't break SEC/FINRA regulations. I can't list everything here they are NOT allowed to do. However, it would be a red flag if they are pretending to be a broker dealer in anyway, including marking up any variable costs. You should be very concerned entering into an arrangement with a non-broker dealer without knowing the people involved and without having an attorney look over the document you will sign.
Thanks for the reply. From what I have gathered, LiveTraders payout is 100%, they make money on commissions.
Total scam, Stay away. You are not trading for a hedge fund. If you believe that you are then you are the exact type of person they prey on.....stupid. Ask them where the hedge fund is registered...with the state or SEC? Ask to see disclosure documents. Ask how much is in their fund. Here is the scam: You pay $5,000 (or as little as $3,000) for their "education". Basically crap taken off the internet showing support and resistance and perfect setups....all useless...and free that you can find anywhere. Then you graduate and become a trader. But don't get too excited...EVERYONE PASSES AND GRADUATES. What is your reward? You get $20,000 in buying power and can trade 100 shares lots and lose $1,000 of your money. Yes...it's your money....you just gave them $5,000 for the "education". But the only thing you have learned is how to get scammed. I can't believe people fall for this. Bulls on Wall Street is such a joke. They even have the classic "trade from the beach" and "look at the huge house I have from trading". Next they will be running late night infomercials. Don't take shortcuts. Stick with a real broker dealer if you want to trade. Also, if you have any questions about if it's legal or not contact the SEC. They will be more than happy to look over the paperwork and let you know if it's legit. You can go to http://www.sec.gov/complaint/question.shtml and fill out the online form.
If they "make money on commissions" then ask them how they are exempt from broker/dealer registration requirements. They claim they accept foreign investors, so perhaps they are operating offshore. According to the SEC: "6. Foreign Broker-Dealer Exemption (Rule 15a-6) The SEC generally uses a territorial approach in applying registration requirements to the international operations of broker-dealers. Under this approach, all broker-dealers physically operating within the United States that induce or attempt to induce securities transactions must register with the SEC, even if their activities are directed only to foreign investors outside of the United States. In addition, foreign broker-dealers that, from outside of the United States, induce or attempt to induce securities transactions by any person in the United States, or that use the means or instrumentalities of interstate commerce of the United States for this purpose, also must register. This includes the use of the internet to offer securities, solicit securities transactions, or advertise investment services to U.S. persons. See Securities Exchange Act Release No. 39779 (March 23, 1998) http://www.sec.gov/rules/interp/33-7516.htm."
I am totally signing up with Fous Alerts....look at the hot chicks you get to hang out with: http://simplenewz.com/2014-10-23/mainstream/feed/101490 This guy is so damn cool. He hangs out on awesome yachts, has a sick place in the Caribbean, and drives bad ass cars. Who wouldn't want to trade there and be an "Accredited Hedge Fund Trader" (I'm not really sure "Accredited Hedge Fund Trader" is a real thing but he chills with babes in thongs sipping champagne!!). And....he has a Visa Black Card!!! WOW...not quite the AmEx Black Card but holy crap! I hope one day I can be just like him. Maybe I'll start a blog to chronicle my journey to super stud status like SCameron Fous.