It sounds like they're cracking down on the firms employing the hybrid-retail no license required structure. Is Tuco doing anything that a million Assent, Genesis, Schonfeld, etc. LLCs don't do?
I am not sticking up for Doug Frederick, we are innocent until proven otherwise, but I just spoke to him about the concerns I had with the "alleged" complaints. First, the SEC used bad accounting in the 1.35 for 800k of it. The admitted that much in court today and said, but still 550k was missing. Doug came up with that amount for them by showing two separate master accounts, one for a russian trading outfit and one for a trading outfit in San Jose. the master accounts for these groups were in the negative because of money paid out to the traders throughout the month when they ask for money payouts. The SEC did not bother asking in what the sub accounts had in them as it was much more than the negative master account showed. My take on the whole thing is this. They dont like the way the firm is structured, they dont like the fact that unlicensed traders are getting 20-1 leverage. On march 20th, Tuco will have its day and from what Doug told me he thinks that they are completely legit, and by the way he never hid anything from the SEC the whole time they have been looking....... I think everybody that is screaming gloom and doom need to wait until the facts present themselves. I have never heard of anyone having any problems of getting their money from TUCO and Doug assured me if they did get a cease and desist that the TUCO account could pay all moneys out to traders in full. Now watch all the sheisters come out of the woodwork and start saying "come to me for a great deal" or "PM me if your a TUCO trader to get a great deal." It has already started. my two cents
"Tuco and Frederick allowed the traders at Tuco to use up to $20 of Tucoâs 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." I am looking for a prop firm who provides 20:1 or similar buying power, if SEC doesn't allow it, how can these firms do business? Or how can I progress in this business? SEC is basically trying to kill prop firm business. Did I sense some envy coming from certain sources? Is this a sign that day traders are doing very well, beating the Wall Street professionals? So the Wall Street crooks use SEC to stop day traders?
In light of the SEC action, I'm actually kind of shocked that people are taking the "no big deal, we'll see what happens" attitude. They have been charged with fraud and been placed under a receiver. The fact that they were able to pay out 200k last week means nothing, as they can of course pay out these limited amounts, it's just the full amount that can't be repaid. (as per the compliance action) The russian sub account explanation seems fishy to say the least. I can understand people sticking with a firm that is losing money until the end, as I have done it myself, but when these type of actions have occurred, I'm literally dumbfounded that people are sticking around. The jigs up for this firm guys. Get your money.
You are wrong. They have NOT been charged with fraud, there is no hint of that in the sec filing. There is no missing money. The sec was not properly accounting for money in sub accounts, and money owed to Tuco by the clearing firm and ecn's. Traders will not lose a dime. The sec's issue is with the business model of the firm, the same business model that 100 other prop firms employ whereby they extend greater than 4-1 leverage on accounts under $25,000. The sec is only investigating Tuco because someone filed a complaint. It's a pretty good bet that someone is a disgruntled business associate seeking to dirupt the company's business.
Here is the relevant passage: "charging them with violations of the broker-dealer registration and antifraud provisions of the Securities Exchange Act of 1934." Are you sure you want to stick to your assertion?
You need to find a firm that has a JBO. Not this illegal sub LLC bullshit. I'm amazed that the SEC still allows these firms to exist.
What is the connection if any between Evolution Capital and Tuco? What ever happened to Evolution Capital in San Diego? Anyone have any info who traded at Evolution Capital and now trades at Tuco?