Isn't this the exact same issue that caused the SEC to go after Warrior Fund last year? They claimed to be a PE firm but the SEC said they were operating as an unregistered BD.
any new developments on this front? I currently trade retail through Tradestation and am very pleased overall with Tradestation except for commissions. Considering going prop soon to save$$ on transaction costs but this stance by the SEC gives me a chill. The only power any government has is the power to crack down on criminals. Well, when there aren't enough criminals, one makes them. One declares so many things to be a crime that it becomes impossible for men to live without breaking laws. Ayn Rand
__________________________________________________ Illum: If you review the Team Trading thread (now over 300 pages), then you will see Itrade2009 has posted warnings regarding these non-registered bd's awhile back. Many of us were NOT aware of such rules (including myself, who is owed funds), and many DID in fact get "scammed". The "honest names" will not get "dragged into the mud" if they are honest, then they have nothing to worry about. The SEC is conducting a FORMAL INVESTIGATION on Team Trading, as people are still waiting for their funds to be returned (from several thousands to tens of thousands each). And now complaints are also being filed with the NY Attorney General. Itrade2009 provides valuable information in helping those who are either unfamiliar with such rules or are attempting to conduct due diligence.
these LLC were never unregistered broker dealers. LLC=limited liability corporation...traders are owners of the corporation. these LLC were corporate accounts and the traders are owners of the firm not customers..which is why the SEC couldn't apply the same rules for individual or 4:1 margins. but these LLC started to get greedy stole the money from the company. and went bankrupt..that is exactly the same reason broker dealers are insured from bankruptcy just too much risk for fraud. before the 70's broker dealers didn't have insurance so if the bd became insolvent from trading losses or embezzlement or for whatever reason the accounts or customers became unsecured creditors against the firm. these scams gets only bigger as business declines and the managment decides to retire early and take the deposits and run. too much fraud in a legit setup but SEC must be getting too much fraud complaints about these LLC lately and this always happen bad markets or when business is bad. these LLC seeing less traders opening accounts and it's time take the money run and close shop.
Wrong. These firms ARE unregistered BD's. There is a very specific definition for which entities must register as BD's. These "LLC's" must register due to the functions they perform. The SEC CAN step in anytime....just ask traders at Tuco and some of the firms that have recently been contacted by the SEC. That is why you are seeing less of these firms.
businesstaxes: 1. some LLC's are registered B/d's, such as Bright, where traders are class b members, not customers. however some LLC's are simply private equity groups, such as Team Trading, which was NEVER a registered broker, although it was an LLC. 2. traders on some LLC's are NOT owners of the firm, they are designated as independent contractors, who trade on "sub-accounts" and are given 1099 income, not K-1's. 3. your third paragraph describes why traders have filed complaints against Team Trading with allegations of commingling and embezzlement of funds. 4. agreed, too much potential for fraud, but usually in a NON-LEGIT setup run by shady people. however, a good firm can survive in both up and down markets, if it's well run and has honest management/owners.
If your referring to OV, I'm sure. The P&L numbers I hear in the office are staggering. As far as the outfit in ARizona, I doubt it.
Then why not just go w/ a registered b/d. Then you don't have to worry about what the SEC is considering