An open letter from our COO on the ongoing MFF saga.
Greetings.
As many of you are no doubt already aware, in late August the Commodity Futures Trading Commission (CFTC) filed suit against My Forex Funds (MFF) for “fraudulently soliciting customers to trade leveraged, margined, or financed retail foreign exchange (retail forex), and leveraged retail commodity transactions.” The complaint alleges that not only did MFF mislead traders about keeping them in simulated accounts, but that MFF essentially provided their own liquidity, acting as the counterparty to all of their traders’ transactions. Further, the complaint alleges that MFF used software in order to manipulate the fills for traders’ orders, effectively causing orders to be filled at worse prices. As of today, all of MFF’s assets have been frozen, as the CFTC attempts to to recover over $300 million in fraudulently collected fees.
This saga highlights many of the worst offenses of firms in the online funding industry, and represents some of the very reasons behind the creation of Purdia Capital. Our CEO Jonas and I founded Purdia to be the best online funding option in the industry for futures traders, and to right many of the wrongs that we saw other firms in this space committing on a regular basis. The MFF saga is an extreme example of the worst conduct of online funding firms, but it represents one end of a sliding scale that all funding firms occupy. Most firms no doubt look relatively innocent in comparison to the actions of MFF, but we think that there are still far too many firms on that half of the spectrum. The simple fact that a funding firm as popular and successful as MFF could be acting so deceitfully is a sobering reminder that we still have much work ahead of us.
I could go on and on about the problems that we see with the online funding industry, but instead I would like to focus on what we are doing differently at Purdia Capital. Everything we do here is intended to bring us closer to our goal of creating the best team of traders in the industry. We don’t hide behind vague rules, deceptive practices, or complicated restrictions to hamper our traders, and our financial incentives are much more closely aligned with those of our traders than any other firm. I think it is also worth highlighting a few specific examples of our model.
First, we work with a registered and regulated broker partner, Tradovate. This means that all of our traders in a Live Funded Account have their trades routed to a live exchange where they are filled by third-party liquidity. We are not in the business of acting as a counterparty to any of our traders’ activities.
Second, we place our traders into genuine funded accounts, which are funded with actual dollars from our primary trading account with Tradovate. When a trader qualifies for a Live Funded Account, they are given access to a sub account with a portion of our actual trading budget. This is absolutely critical, because it means that once traders are in the Live Funded Account trading our money, our incentives are 100% aligned with those of the trader.
Third, and perhaps most importantly, we truly believe in the concept of building a team of traders. This goes way beyond simply having more funded traders, and relates more to how we work with our funded traders. We offer something no other online funding firm does, and that is an active team of risk managers that communicate on a regular basis with their assigned traders. These communications frequently cover trading performance, risk management, adjustments to risk parameters, tweaks to trading strategy, and more. This active line of communication between Purdia Capital and our funded traders is something you genuinely will not find anywhere else.
There is a lot more that we do differently than other online funding firms, but I just wanted to highlight a few that put us in start contrast to not only MFF and their seemingly fraudulent behavior, but also the rest of the firms in this industry. I encourage anyone reading this to think about what the most important factors are in making a trading partner trustworthy, and to see how we, along with other firms, match up against that list.
As always, we wish to always maintain open lines of communication with our traders, and encourage anyone with questions or concerns to reach out via email or support chat. It is my belief that we will succeed in changing the status quo of the online funding industry for the better, and we will do it together.
Thank you all for being a part of the Purdia Capital team.
Best,
Frank Paladino
COO, Purdia Capital
