Cy Group is not registered with FINRA

Discussion in 'Prop Firms' started by HeSaidSheSaid, Apr 4, 2012.

  1. initially, I searched the FINRA website to see if Cy Group is registered with them, but nothing came up. then I sent email to FINRA to inquire about the group registration, they also confirmed the firm is not registered with them.
  2. shneed


    now what?
  3. rmorse

    rmorse Sponsor

    They don't claim to be broker dealers on their website. What made you check?
  4. I think they're a sub of a CBSX b/d. CBSX firms are not registered with FINRA. FINRA is a different SRO and regulates mostly retail firms.

    I personally have never dealt with them but they've been around a while. If they require a series 56, they are operating legally and your account will be registered with a heavily-regulated broker-dealer. If the accounts are off-shore and they are operating out of the US, then you may want to do your due diligence prior to selecting a firm to trade with.

    disclaimer: I have no experience with the group. I have never traded with them and I'm not affiliated in any way, shape, form, scope or measure. Just putting out the facts.
  5. t0pd0g


    They are NOT a sub of any CBSX BD. They are operating a unregistered and illegal BD in the US and these firms are aggressively being shut down by the SEC. BEWARE!


  6. shneed


    why do you care what type of a firm they are, do they owe you money something, did they mistreat you?
  7. lol i doubt they're being shut down. There are quite a few ways to operate prop firms legally in an inexpensive manner. I highly doubt the SEC gives a shit being there isn't 1 account of someone they owe money to.
  8. rmorse

    rmorse Sponsor

    I don't know anything about this firm Cy Group. However, set up properly, it is possible to run a prop trading business as "customer" rather than firm. You just can't claim to be brokers, mark up commissions or claim the sub accounts are owned by the traders. These are not all the issues that need to be addressed. But, it can be done and we have clients that do it. Profits are derived from trading, not fees.

    Hedge funds are set up in this manner. Typically a hedge fund is an LP and a trading group would choose an LLC.

  9. That's good info to know. However, if profits are derived from trading, and not on a markup of commissions, then wouldn't the traders be considered employees, and not "members" as with most registered prop firms?
  10. rmorse

    rmorse Sponsor

    Like any partnership, if the trader is an investor and part of the LLC operating agreement, they are either a limited or general partner. If not, they are an employee or can be an outside side party hired to do a job and paid by 1099 not w2. You need a good attorney to address the structure you want. Once set up, it should not be an issue. The LLc can give trading rights to any party that is acceptable to your broker and the managing partner of the LLC.

    #10     Apr 10, 2012