Hi, all: The day trading firm I have been trading with in NY has the same requirement with Tuco Trading( $5,000 deposit, 20:1 leverage). However, Tuco trading got caught by SEC recently. Can anyone tell me if my broker is illegal ? If so, why are there still so many day trading firms like this in new york? Will they get shut down like Tuco if they got caught? I copied over some information about Tuco here. "The Securities and Exchange Commission today announced that it has obtained an emergency court order against an unregistered securities day-trading firm in La Jolla, Calif., that was not disclosing to traders that more than one-third of their money was being used to cover other traders' losses or pay firm expenses. The SEC's complaint also alleges that for each $1 in the trader's sub-account, Tuco and Frederick allowed the traders at Tuco to use up to $20 of Tuco's equity, which has been invested by other traders, to purchase securities (20:1 buying power). NASD and NYSE regulations, however, only allow a day-trader to have 4:1 buying power. they allowed traders to day-trade without meeting the $25,000 minimum equity requirement under NASD regulations for such trading. " The only difference is my broker probably registered.