CFG Trader Goes Under
April 1, 2007 by Trader Rich
This news is about two weeks old but I've been meaning to post it anyway. CFG Trader, also known as Forefront Investments Corporation, was suspended because they failed to maintain and produce current and accurate books and records. They were forced to liquidate all of their customers open positions. Similar to what happened to Refco, traders who had a balance of money at CFG may be screwed. I received an email from FXCM where they state that they are trying to rescue about 3,800 of CFG Trader accounts. This would need regulatory approval but FXCM would contribute approximately $1 million to make up the difference between the assets of CFG Trader and the funds owed to CFG clients due to under-capitalization. Under this proposed agreement, supposedly no trader will lose any money.
This just confirms what others and myself have said previously about the risk of trading forex. Not only do you have to worry about your individual trade risk, but you also have to worry about whether your broker is going to go broke or not. This has been a known risk factor when trading forex and if you want to trade forex, you're just have to live with it. Do your research and pick a broker that has financial stability. I've mentioned ways in which you can protect yourself as much as possible in previous posts. In addition to broker research, you should only keep whatever money is necessary in your account and periodically take your profits out.
You can read more of my previous posts here:
How Can I Prevent Fraud When Trading Forex?
Is Your Money At Your Forex Broker Safe?
FXCM Compliance Officer Response
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CFGtrader , Forefront owners are ether buying I-Trade-FX or partnering with them, never the less they are still the same group of cronies just a new company name to fleas from!! One would need to be a complete nimrod to deal with associated with them again. Let’s see, Coesfx closed down; spotfx closed down; CFGtrader Closed Down ill give I Trade FX tell summers end to bite the dust. Where’s the NFA when we need them, allowing snakes like this group continue doing business.
Obviously this person that commented has no idea and didn\’t research this at all… ITradeFX is a relatively new broker and has NO AFFILIATION with CFG. They went in and purchased the assets… Go to http://www.itradefx.com/press_release_cfg.htm and do some research before posting a comment… Just to let you know the legitimacy of iTradeFX, obviously the NFA allowed them to outbid FXCM!….
i-Trade FX is in no way related to CFG. i-Trade FX bought those CFG accounts and actually refilled them to replentish the assets to allow people to trade or pull their money as a sign of goodwill. People need to be more responsible with what they say and actually do research.