If your FX broker goes under, you'll have to wait until bankruptcy settlement!

Discussion in 'Forex' started by crgarcia, Mar 5, 2008.

  1. Your FX funds are considered broker assets, and as such are subject to liquidation when the bankruptcy process ends.

    So in short, you'll have to wait months or years, pay lawyers with your own pocket, and finally receive just a fraction of your account value.

    Only fools invest in retail spot forex.
  2. So far there has only been one incident of this happening and that was RefcoFX. I'm sure the major brokers such as FXCM and Gain Capital are safe.
  3. cstfx


    You're just getting this now?
  4. Segregated bank account = sleepin' peacefully. :)
  5. Took two years for me to just get a portion of my funds back when my futures broker went under.

    BTW, they stated that funds were segregated, but they lied. When opening an account, especially with an IB (introducing broker), make sure the check you write is to a bank, and not the broker. Otherwise, odds are its not segregated.

  6. Jayford, I'm curious, which futures broker of yours went under?

  7. More misinformation from the clueless :p

    It depends which regulatory authority the broker comes under.

    Also, no-one 'invests' in the retail spot forex market, they speculate.

  8. Go with a broker that allows a bank guaratee. This way, only 20% of your funds are kept with the broker.
  9. ssss


    SEC ,SIPC and Loydsbank insurance are better as CFTC

    In ET was one trader from France ,which stated ,that after years received some until 50% of he's fundsfrom Refco ,which
    was public noted(!) andmore as FXCM
  10. Even if they really have segregated accounts, it just doesn't matter.

    Segregated accounts have NO legal validity, and segregated accounts are considered part of the broker money, not the customer, in a bankruptcy.

    The NFA has a clear warning on this.
    #10     Mar 6, 2008