Well, gee, this is almost like the proverbial "kissing your sister" LOL - let me just say, that I'm really glad that the other type firms are doing some sophisticated pairt strategies (in all sincerity, it does no one any good to either lose, or see someone else, lose money when trading). For the most part, and please correct me if I'm wrong, pairs strategies that our people take part in do tend to be a bit capital intensive, and most firms, regulated or not, don't have the money to allow these strategies. Now, I'm just talking about "my world" - and I'm sure there are firms that give their traders $millions to utilize - and from what I can attest to, based on traders joining us from other firms, we seem to offer an excellent overall package, otherwise these smart, successful traders would be somewhere else. All the trading aside, running a successful business requires a heck of a lot of dedication..whether it be from the individual trader, or the family that does their best to facilitate their requirements. Some choose the licensed contractor, some choose the "other guy" - heck, I've worked with both, and we've all seen "Holmes on Homes" right, LOL. Anyway, thanks for the adult and congenial post (I mean that). Don
I thought I was the Lone Ranger lately....LOL. However, I see you're responding to MoMo in the other thread, and I haven't checked the new "retail vs. prop" yet, but I'll get there. Don
can Don or anyone else specifically cite a case when a exchange or SRO took regulatory action against a prop firm for not paying traders or the like? i have known of action being taken for capital short sales, and licenses but i can not recall a prop firm ever being disciplined for issues regarding withholding trader funds or other actions regarding how they treat their traders? Also for Non nasd firms where can you see regulatory histories?
The Arbitration Clause in most agreements is the course of action for any licensed trader/firm. And, yes, they do tend to favor the "little guy" - You can always check with the SRO for any member firm (their exchange). Don
I do not mean arbitration where the trader got his money back. I mean a situation where as a result of a dispute with a trader, the firm or its principals were fined or suspended by the regulators or where forced to pay significant punitive damages to a trader.
I believe the principals of Harbor Securities were banned from the industry and or fined for their actions. I think Don knows more about this.
From a strictly legal perspective (I'm not a lawyer, but from my old days in public accounting)....your question would not make any sense. If the money was paid back then there were no "damages" - and if the money wasn't paid back, then you go to arbitration or to civil court. Both parties sign the same contract stipulating arbitration. And, we are subject to a civil suit just like any other company. The point being that those who choose to align themselves with an "entity", non member, non-registered, etc. type firm wouldn't even have the benefit of arbitration...so, if you're concerned about your money with a firm, then I would think you would prefer to have the safety of this benefit. If your bank makes an error on your account, and then gives the money back, you can hardly expect them to pay you punitive damages. As far as being suspended, fined, censured, etc., there are a million pages on some firms, just check the NYSE web page. I won't mention any names...but if you search for Firm xxx, and "fines" you'll find a heck of a lot. Sorry that there is not "tar and feathering" of all the "bad guys" out there, LOL. All the best, Don
true but that was after they blew up Here is what I am getting at. A trader in a prop firms money is at risk in one of two ways. the first is that the firm blows up and he loses his deposit or retained earnings. The trader in this case has very little recourse weather he is an llc or a sro member as Harbour was.The second (and more common) situation is that the firm simply refuses to return money they owe a trader. This is done is many cases to punish a trader who leaves for a better deal. This illegal practice (and it has happened to me) can make life very difficult for a trader and even if all he gets his capital back after arbitrating he had to deal with a lot of agravation and his capital was tied up for a long period of time. the frim on theother hand is really out nothing. I would like to know if direct exchange or Sro membership would preclude a firm a from holding my money because of fear of regulators.
I suggest that you never sign up with a business, trading or otherwise, that keeps your money, whether the "12 month" type "hold" or that does not allow for withdrawals whenever you want them. After the 3 day settlement of trades, anyone who wants can get their money....we're proud to put that in writing. I sincerely try to point new and experienced traders away from "known firms of concern" - and really push them to do their due diligence. I don't expect every firm to follow the same standards we do, but I at hope the trader goes in to any firm with eyes wide open. It's easy enough to do proper due diligence, and I have helped others in the past, (yes even traders that I knew would not have the ability to trade at Bright, LOL). I am always willing to help those who ask. Don