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Originally Posted by scorpion
I think those got to do more with fraud, not minimum capital requirement, not the size of firm. Records are expected to be accurate, not using some kind of creative accounting to lie the financial situation. The best example is Refco which went bankrupt with $4,000,000,000 capital. Number says nothing, because they hid the same amount of debt under our noses.
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True, money isn't everything. But at least its a starting point. The NFA cited AMI specifically with "failure to maintain required adjusted net capital." You can see this by looking at the CFTC reports which show AMI had been on the bubble for many months. Using that logic it isn't hard to see some of the other dead forex firms walking suffering the exact same fate. So numbers do mean something. Even the NFA says in its statement that the vast majority of regulatory problems come from smaller, undercapitalized firms which is precisely why they want to raise capital requirements. These two cases provide further evidence of that.