According to RBC Daily, some clients of Broco, a Forex broker, which survived the SEC and FFMS claims, cannot withdraw their money for a month or so. Valery Maltsev, President of Broco Invest, confirmed the delays in payments due to the fact that the aggregate amount of fund for withdrawal exceeded the planned sums. According to him, 10% of Broco’s clients are currently suffering payment delays because the amount of withdrawal requests has increased dramatically due to much tougher rivalry with other brokers.
Let’s find out what is really going on…
SEC Fines Broco. Russia’s Financial Watchdog Cancels Broco’s License. Major Consequences
At this point, some 10% of Broco’s clients cannot withdraw their funds. According to Broco, all of them will get their money back +0.1% for every day of the payment delay.
Previously, Russia’s financial regulator (FFMS) canceled Broco’s license as its capital failed to match the requirements.
In 2010, the SEC accused Broco of manipulating with clients’ funds when trading US stocks. As a result, the US brokers suffered from a major damage - over $600.000.
At first, Maltsev denied any involvement of his company, thus putting the blame on one of the clients. Eventually, the SEC and Broco agreed on a $1.33M fine.
Expert Opinion: Broco’s Real State Of Affairs
According to Eugene Olkhovsky, ’s leading expert in financial markets from Canada, as far as a broker’s image and reliability are concerned, non-payments, payment delays and no sane reasoning for that… are the wakeup calls for its clients (traders and investors). Last spring, Interpol and Russian police investigated into Broco’s activities on the Austrian authorities’ demand. Then the SEC started an investigation against Broco, thus freezing the company’s assets and eventually fining Broco to the amount of $1.3 million.
Previously, warned their students and other individual traders about the danger of trading with Broco.
The first and major threat is that successful traders may have difficulty withdrawing their profits. The second one is connected with the quality of Broco’s services, including dealing, execution of orders etc. In this aspect, many there is a sea of complaints about the poor quality of the company’s services.
These days the collapse of “dirty brokers” is easy to predict. Firstly, everything starts with complaints about the quality of dealing, execution of orders, continuous slippage, withdrawal of funds etc. Moreover, big-scale, reliable brokers are concerned about this as well because such dirty tricks undermine people’s trust and confidence in financial markets. Therefore, people are afraid of becoming traders or investors, thinking that all brokers are cheating and playing dirty tricks on their clients.
Secondly, crisis-ridden brokers suspend payments. And lastly, while nearing a collapse, such brokers start focusing on advertising campaigns - including unbelievable bonuses and gifts - in order to fulfill their liabilities to the existing clients at the expense of attracting new clients.
That is why, when you start questioning a certain broker’s image and reliability, simply find another, reliable broker. There are plenty of them.
Market Leader and would appreciate if you could participate in a survey. Please, visit the Academy’s forum for traders and investors and answer the following question:
In your opinion, what is the real reason for Broco’s non-payments and payment delays?
