Everyone loves Meir Barak of TradeNet. Heck, I even kinda-sorta like Meir Barak.
Every day, he gets onto his dumb little YouTube channel and puts on quite a show. Quickly dashing and dancing with lots of colorful language and prognostication on how XYZ stock is breaking out, or breaking down.
Hollering into his microphone how everyone should pile in for big profits and how he supposedly earns easy money day trading.
Meir is the ultimate huckster. If you are bored, you can tune in daily for some cheap entertainment. Sort of like porn for day traders.
The “free money” funded trader program
Every 20 minutes or so, he takes a commercial break and then immediately starts hyping his “funded trader program.”
You know the program, TradingSchools.Org wrote about it over a year ago. You can read the article here.
And of course, we wrote another article here.
The program was stupid simple. You pay Meir a fee ranging from $500 to $9k for “day trading education.”
The fee was then converted into “chuck-e-cheese tokens” where wannabe day traders could then trade on a stock video game simulator (that Meir owned and operated) and if the wannabe day trader was lucky enough to make money in simulator mode, then Meir would pay you a percentage of whatever you earned on a simulator. (AKA Meir’s Magical Trading Simulator)
TradingSchools.Org tore the program a new asshole
Of course, the simulator scheme was totally illegal as the simulator trades were based upon CFD’s or Contracts for Difference trading.
Contracts for Difference were banned in 2008(ish) under the Dodd Frank Regulatory Act.
But Meir didn’t seem to give that much thought. In fact, he recruited TradingSchools.Org to promote the program and pay us 20% of whatever the sucker students were willing to deposit.
We didn’t take the offer. Although it was tempting. And it was generous.
But many other social media types, looking to make a quick buck was all over the TradeNet promotional scheme. I personally know a few characters that made over $100k by relentlessly pumping YouTube videos hawking the affiliate offer.
But who wants to be subpoenaed by the Securities and Exchange Commission? Not me. Been there, done that.
Regardless, the whole scheme was a train wreck in the making — from day one. It was only a matter of time before the loving hand of the SEC regulators showed up and dropped a turd onto Meir’s lap.
The Securities and Exchange Commission shows up
A few months ago, the entirely predictable regulatory event transpires…the subpoenas start flying in every possible direction. All of the promotors were scrambling for cover, YouTube videos started disappearing faster than a fart in the wind.
People that had made big money referring students to TradeNet were suddenly overcome with amnesia. “Meir Barak and TradeNet? Never hear of him! Did I ever promote this dog shit? Not me!
Money started flying out of traceable bank accounts and into untraceable bitcoin wallets faster than a hamster on his wheel.
We have seen all this before. But usually, it involves bucket shop trading venues located in the Caribbean or some eastern European country like Bulgaria.
What is laughable and funny is that Meir’s official “funded trader” program was located in Vanuatu. This place is literally located in the middle of nowhere…far, far away from the SEC. Have a look for yourself:
Isn’t this charming? The “funded trader” program was located on this little coconut atoll. Apparently, somewhere hidden among the palm trees, you will find Meir sipping a cocktail and day trading on his laptop.
Vanuatu is a land known for its robust laws and consumer protections. Behold, the official police department of Vanuatu…
And the Vanuatu post office is something everyone must experience at least once…
All day trading disputes are settled according to local rules…
I think you get the point. If this whole TradeNet “funded trader” scheme were even remotely legal, then why would Meir have it based on an island in the middle of the Pacific Ocean?
The whole thing was doomed to fail. And of course, it did.
The Securities and Exchange Investigation
Personally, I knew about the commencement of the investigation on the day the subpoenas started hitting the inboxes.
But what I didnt know was how Meir Barak would handle the situation.
Most of the characters I write about, when this sort of thing happens…the website quickly disappears and the “perp” goes deep underground.
However, with Meir, he pretty much threw up his hands and said, “Hey, I did it! But was it really so wrong?”
Well, if there is one thing everyone agrees with regarding Meir Barak, he is very charming. He is ultra nice. If there is a mean bone in his body, I certainly never discovered it. And let’s not forget that I wrote TWO really nasty articles about him.
But Meir was a real gentleman about my articles. We skyped and talked about the situation. I told him plainly…”Meir, this is going to get shut down. Its not even remotely legal under the existing framework.”
Meir responded, “I dont even know if the framework exists or has addressed this business model. In fact, how is this different than TopStep Trader where they are paying their traders for doing the exact same thing — trading on Futures simulators.”
He had a point. The guys offering “funded trader” Futures trading accounts are now all nearly exclusive simulator where the traders/students are simply betting against the house, not other market participants.
How the SEC ruled on the issue
On October 23, 2020 the SEC came down on Meir Barak with their ruling.
The SEC, through their investigation discovered that TradeNet had sold approximately 5000 of these “funded trader” programs ranging in price from $500 to $9000.
In my own estimation, the average trader probably deposited about $3,000 per student. 5000 X $3,000 gives a total amount of roughly $15,000,000.
Considering that 98% of day traders lose everything. Which was argued by the article that I recently wrote, we should consider that Meir did quite well and probably netted a few million in profit.
But the SEC, of course showed up…so how much would they claw back? Well, it turns out that the SEC hit Meir with a relatively meager fine of ‘only’ $130k.
Personally, I thought for sure that it would be in the multiples of millions. So although the SEC order looks quite scary per the language…it was a really lite fine.
In my opinion, the thing that really saved Meir’s ass was that he paid the traders what they earned on the simulator. And it appears that he fully cooperated and really charmed the SEC into an extremely favorable settlement.
So what exactly did Meir Barak and TradeNet get into regulatory trouble over? Quite simply, it was because the simulated trading was done with CFD’s — which are illegal under Dodd-Frank.
The Securities and Exchange Commission’s BIG surprise
I titled this article “TradeNet Busted (not surprising) and a BIG surprise.”
What I am about to reveal is indeed earth shattering regarding the “trader funding” business model.
We already knew that the CFTC or Commodity Futures Trading Commission had already given their blessing regarding the “trader funding” business model, and they surprisingly have allowed the “simulator pay scheme” to also continue.
However, there has been no ruling from the SEC regarding this business model. Until now.
The Regulatory Shift
Most readers are not aware, but the SEC has a section on their website titled, “Public Statements.”
Although these two little words mean very little to the average reader, these “Public Statements” are basically tantamount to “Supreme Court Rulings.”
With just a single comment, the SEC can effectuate major changes and different interpretations of existing securities laws. Just a tiny little comment can be earth-shattering news and shift competitor advantages and disadvantages into extreme positions.
On October 23, 2020 — the very same day that Meir got hit — the SEC Commissioner, Hester Peirce have a very rare public commentary.
When I read it, I was pretty much in shock.
In Hester Peirce’s public commentary, which is titled: Statement Regarding TradeNet Capital Ltd., she dramatically altered the landscape with just a two paragraph statement.
I have included the full comment below…
Oct. 23, 2020
I supported today’s Commission action against Tradenet Capital Markets Ltd., though not without reservations. Tradenet provided its customers “Day Trader Education Packages” that included a simulated “funded account” in which they could “trade” securities. The participants received a portion of the upside, and their downside was capped as their accounts were closed if they fell below predetermined thresholds. Some purchasers of these packages appear to have voluntarily purchased successive packages, and participants appear to have transacted with Tradenet voluntarily and with clear information about the terms of the deal. While Tradenet’s product offering had an educational component, it was primarily about the simulated “funded account,” which could not have been offered to U.S. retail investors under our existing rules
I do believe that there is room in our regulatory framework for creative investor education programs that give investors the opportunity to simulate trading in various financial products and assembling an investment portfolio. Gamification of educational experiences can promote learning, and the use of awards or prizes—even cash prizes—can provide incentives to take the game seriously and thus increase the educational value of the experience. I do not view this order as closing the door to these types of educational experiences. Moreover, firms, schools, and entrepreneurs who are interested in offering genuine learning opportunities to investors through simulated trading experiences with financial incentives but are concerned that their design may raise issues under the securities laws should engage with the Commission to explore how they could offer it in a manner consistent with our rules.
So what does all of this mean…?
Currently, the “funded trader” space is currently dominated by Top Step Trader and Earn2Trade, with a few smaller laggards and more than a few outright scams competing in the Futures space.
The SEC’s stance has now unshackled equities and it would appear there is going to be a mad rush for players to jump into this new open space and offer similar services (Top Step, Earn2Trade, etc).
But there are still questions that need to be answered. If you read the SEC’s position, “(if you) are concerned that their design may raise issues under the securities laws should engage with the Commission to explore how they could offer it in a manner consistent with our rules.
Essentially, the SEC is saying…”before you do this, you need to contact us, and you need to discover out stance on certain issues.
TradingSchools.Org is investigating
As many readers are aware, my wife Susanne, who is also my lawyer is already communicating with the SEC and will be drafting clear guidelines on how “trading educators” can potentially implement “funded trader” opportunities into their own product offerings.
Please reach out to emmett@tradingschools.org if you are interested in learning more. This will NOT BE LEGAL ADVICE. Instead, I will be drafting a general guide to the rules.
Some of the pertinent questions that need to be answered…
- Will the SEC allow companies to skirt the PDT rule with the simulated accounts?
- Will traders be deemed “professional” traders and be forced to pay “professional fees?” like what is currently happening on the Futures side?
- Will companies offering simulated funding opportunities be subject to the same sort of anti-bank fraud and money laundering rules currently enforced with broker dealers?
- What and where are the landmines that the SEC deems “out of bounds” with respect to current securities laws?
Obviously, this is going to set off a round of consumer fraud at levels we have not seen in quite some time.
As a writer, reviewer, and general pain in the ass whistleblower, I hope to keep exposing the frauds in this newfound space, and hopefully keep the landscape clean and clear for the new companies which I imagine will be arriving shortly.
Thanks for reading.
-Emmett
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CFDs have been available and common place for along time and I can see the US SEC bias in this article. Also read Meir is UK based and has a company based in Limasol, Cyprus , not Vanuatu.
Need to bear in Mind that CFD’s are banned in the US but are legal in the UK and Australia. In fact , after the MFGlobal debarcle in 2011, None of the Aussie brokers had Futures and had to go overseas to get a proper account.
Good Morning. When I get to your website, look at it with a little caution. Another website that makes everyone green and does not contribute anything that works. But no surprise. You give a lot of valuable information and everything is well founded. As you say, the good thing about this man is that he pays those who are profitable. The costs of buying shares in your market maker, from cfds. they are really low at $ 1.5 minimum. When you read the contract, it does not lie and says everything you say in your article. The only thing I see is a possible conflict of interest when buying and selling on your platform. Forks. Etc. But if there is something we can say about it, it is that they pay and put everything in the contracts.
Very interesting article, thanks for taking the time to write it. I participated in Meir’s trading room a few years back and funded my account with 25k with no prior trading background. Needless to say I lost all my money and upon research the nature of how CFTs work after the fact, immediately realized that its all basically a probabilistic scam involving “brokers” taking the opposite side of positions to profit off the expectation that 90-95% of day traders blow out their accounts.
Therefore your article provided a degree of closure for something I long suspected. Although the SEC feedback on this is very disappointing to say the least.
Hi Hype71,
Thanks for the comment. I am glad it put some closure to the experience.
However, what you really need to think about is how did you come into contact with the scam? Once you understand this, then you wont be so easily fooled the next time around.
I would like to add, there is nothing wrong with trading and investing. But day trading is such a slanted game that your odds are practically zero of actually making any money. However, you CAN make plenty of money by becoming an investor and buying quality companies, and not selling them. Or, by purchasing quality companies after a market correction and then catching the bounce higher.
As far as shorting, the problem that I have with shorting is that the Federal Reserve just keeps pushing the market higher with relentless money printing. At some point, the music will stop and the party will be over.
But high quality companies, even in the face of a recession will never go out of style.
Best wishes,
Emmett
I never joined or considered joining any of tradenet’s cfd programs. But I do go on their free youtube channel from time to time to watch them trade and get ideas.
I mean it seems like the team there does pretty good but who knows, sometimes i take on of their trades – half the times they work, half the time they dont, but somehow when Meir shows his P/L at end of day he’s usually up huge ammounts and looks like a profitable trader.
My question is this: Do you think Meir (and his entire team) are really taking the trades they are claiming to take? Are they real traders, trading for real money? Making real money in the markets? His lead anaylst Scott lives in US and claims to be trading on a Fidelity account. So yeah just want to get your opinion on this – or is the whole thing just an act in order to bring in business for their cfd program?
Wow. If Meir brought to light his personal trading track record (which is supposedly good), this may have helped soften the blow that trading “can be taken seriously” and reap rewards.
Whoa and woe
Thanks for the article. I concur… bad move by the SEC. Also, yes, everyone loves Meir Barak. What’s there not to like? He’s as transparent and as personable as they come.
However, I am not ready to fork over $9000 for training.
Meir is definitely charming, seductive, and disarming. A master of the soft sell. He plays himself as meek and generous.
It’s a well-crafted persona. He dodged a bullet with the SEC. A big bullet.
That means if TradeNet was using CME instruments like ES, CL etc and not CFDs their fine, penalty etc would have been zero.The law works on precedence unless there comes up a complex new situation which is different. CFTC has already blessed the model. SEC says clarify upfront if you have a doubt. But if someone is replicating what TopStep or Earn2Trade are doing, where is the doubt?
Right.
What’s funny is that there seem to be no written rules at the CFTC regarding this model.
And it appears, once again, there are no written rules at the SEC regarding this model.
Interested to read that your wife is a lawyer and is familiar with SEC procedures.
I have an account with Schwab. I recently had a short position that went slightly in the red and Schwab charged margin interest on the debit balance although there was plenty of cleared cash in my sweep fund. I have inquired of Vanguard and Fidelity and neither of them would make such a charge.
This practice is so unfair that I suspect that there may be a SEC regulation forbidding it or a court case ruling against it.
Has anyone else had such an experience? Is there a free alternative to Lexis where one may look such things up?
I use CaseText for all my legal research and motion drafting. Yes, I write almost all of my motions and then have the lawyers tighten it up.
CaseText has a two-week free trial, so you should be able to research the issue there. I like it better than Lexis.
To really drill down into a case, for pleadings, oppositions, failed 12b’s and msj’s then I like to pull the cases directly from Pacer. I learn more from failed 12b’s and msj’s than anything else.
Wow and holy shiiite
what the hell the SEC thinking?
like You Emmet my freaking mind shock! I mean the floodgates literally have been blown up for unfettered race to CFD funded programs will pop up like prickly acne laces teens face. So many questions now!!
I was totally shocked as well. But the big question is…what are the new rules? What are these new rules? Are they going to force the simulated pay scheme to follow the PDT rule?
And, in analyzing the TradeNet regulatory action…it was the CFD’s that got Meir into trouble. But if Meir were offering SIM accounts that based their pricing on actually listed securities under the purview of the SEC, then he likely would have avoided the regulatory action.
I am taking the chairman’s statement as a major shift in policy. First, they are frustrated with offshore CFD’s as they are increasingly clever at hiding their tracks. But what is the ultimate purpose of the CFD vendor? Its to skirt the PDT rule. So I believe the SEC, knowing that the only way to overturn the PDT rule would be an act of Congress, and knowing that Congress will never do it…are creating a loophole.
Using my crystal ball, I will peek into the future…and this future will likely be…
Day trading educational providers will no longer be educational providers. They will morph into educational providers offering “cash rewards” as part of the “educational experience.” The students will be trading on sim accounts under the banner of the educational provider.
If the student becomes profitable (which most will not) then the educational provider will lose money, and the student will be forced into the actual marketplace.
There are so many variables to this. And its initially going to be rife with unimaginable fraud and abuse. But the SEC has basically given up and said…”It’s OK with us.”
Currently, I am getting to the bottom of what these new rules will actually be. There is no uniform code or rulebook. It appears to be open season.
Additionally, at what point does this not become a financial regulatory problem and start becoming a consumer trade problem? It seems we will be blurring the regulatory lines between the FTC and the SEC.
Thank you for the response but the issue still is the CFDs, how can Meir et all circumvent this? As it stands he was charged for what he ( tradenet) “previously had done” Currently No US traders can purchase any “ educational packages”
He even has it stated on his website.
Is he planning on entering the US markets again? Are the US traders will be subjected to different rules?
Currently he has access to everyone else globally with a few exemption countries like the US
Why would he bother with the US regulatory bodies when he could just focus on China for example? ( Chinese love to gamble)
I cannot see any way around the Dodd Frank Act regarding CFDs
As for this statement:
If the student becomes profitable (which most will not) then the educational provider will lose money, and the student will be forced into the actual marketplace
This was already happening way before he got busted, several you tubers have documented this event that making Big CFD gains were met with accounts being moved from tradenet to Colmex equities account that supposedly partook in real markets which could be verified in the level II when place orders even oddlot would actually show on the level II
One thing for sure its going to be a shit show And all manner of new guru clowns will drown out my youtube videos! Geesh i was hoping to see less of that nonsense
Well, I am working on getting the rules now. Will be posting an update on what the SEC will deem non-actionable.
The bottom line is that the Chairwoman’s statement was clear regarding “cash rewards.”
The way I see this… it’s going to happen. And I rather suspect the Meir will be back and is already working on crafting new offerings. I also expect that TopStep is also looking into this as well.
Whatever happens, I want to be the first to the party because there will be many stories to write about. It’s going to be crazy. This is a real threat to the Robinhood brokerages and everyone else offering “free trading.”
The bottom line is that this will basically destroy the PDT rule.
This is just terrible news about the SEC’s statement. So if the worst comes to pass from this, they are basically letting all the new or prospective scam CFD brokers run amok selling “trading educational packages” for credits to play in their casinos. More retailers newbs would be fooled and duped by these stinking type of systemic in-house shamshows. But I guess this is the same age-old problem of all the media narrative the scammy vendors and gurus can bribe and affect. So brand new retailers could go into these thinking erroneously that their own chances are somehow always better than 2% (or the next guy) that they won’t lose money net within a year, and also thinking these CFD casinos are “alright” because too many newbs erroneously think these places can be gambling-legit enough like any regular casino. But as the prior tradingschools article on “Comex Pro and CFDs” detail, there’s all sort of shenanigans a CFD broker setup and pull off, fiddling with spreads , volatility , etc., the tricks in common with the offshore old fad forex scam brokers (such as the broker controllable version of MT4) and then the shady binary options scams. I hope this SEC official lady wises up real quick (or isn’t somehow compromised herself!) that these “education only” simu games will just be run shadily by these cfd brokers, and american retailer newbs should have no business basing their prospective trading sim or otherwise on a cfd basis in the first place. It’s dumb where there’s already micro-futures available to trade without needing 25k for the pdt rule, but too many newbs are fooled by the Ross, Bond, and the like, ad and faux trading narrative nonsense that daytrading and scalping insta-pumped, then dumped stocks is somehow much easier to trade than the drab and limited futures instruments selection. If retail newbs have trouble putting together funds to meet the PDT rule to trade stocks, they’re also likely trying to trade with funds they can’t afford to lose, made worse by all the ridculous overpriced shamshow education hotdog “packages” and monthly churn subs and fees of these snakeoil vendors. Glad to hear tradingschools will be staying on top of the news of this.
I believe that as long as the “bucket shop casinos” are using actual stock data from the exchanges, then they will allow the educational providers to offer their own “bucket shop casino.”
The issue with TradeNet was that Meir was using CFD data, and not actual data sanctioned by the exchange. It appears the use of CFD’s was the kernel of the regulatory complaint.
Yes, it’s a terrible business model where the consumer will continue to likely be harmed. However, we have to accept the ruling of the SEC and just deal with the new regulatory framework. (Whatever that framework ultimately might be)
What’s the big deal? CFD are legal in Europe? Why are you all so touchy.
I learnt from them and actually making money, real money.
What’s your problem? People lose? We know. It’s not easy.
If you follow Meir you will see that his trades are real, try to do the same.
I was quite skeptical for a while but after using the free service I decided to join and I am happy I did it.
Let me explain why CFD’s are illegal in the United States. I will try and present the “bigger picture” and give you a slightly different paradigm to examine the issue…
Let’s imagine for a moment that you are the assistant to the supply chain manager for a military contractor in Virginia. The Virginia company builds ships for the US Navy, and is a publicly-traded company. Recently, your company won a $13 billion dollar contract to build the Navy’s next-generation class of destroyers. It’s a huge win for your publicly-traded company. This will bring hundreds of new jobs to the shipyards located in Newport News, Virginia. And this will greatly affect the local economy. The positive news of the massive government contract is known by everyone — including housing developers in the area, subcontractors and suppliers, even Wal Mart and Costco are acquiring land and preparing to expand into the area. Additionally, the shareholders of the military contractor have also greatly huge gains in their stock holdings — as the stock has increased from $16 per share to $80 per share.
Everything is looking so wonderful.
However, an email arrives from an anonymous whistleblower or pesky journalist. Contained within this email is evidence that your company committed fraud on the US taxpayers by overcharging on the prior contract, and there is additional evidence that your company hid this evidence from the congressional committee that oversaw the approval of the contract.
Oh no, you are just the assistant to the supply chain manager and only make $7 per hour and this highly damaging information has accidentally fallen directly into your lap! What should you do?
Well, you are a very smart person, and not very happy about earning $7 per hour. You then think about how you can leverage this information for your own personal gain. But you dont really understand these odd looking financial documents that were contained within this mysterious email. And so, you then take the email and the financial documents to your friend…who happens to be an accountant. He knows exactly what is contained within documents and quickly decipher’s the spreadsheets.
And so, your accountant tells you…”Holy shit, your company is a fraud, they are nearly bankrupt, and it turns out that the highly religious company CEO is also a wife swapper and had a child out of wedlock from an orgy and also gave another woman a venereal disease.”
Your accountant also tells you, “Look, you cannot do anything with this information for your own financial benefit. You must turn this over to the authorities immediately.”
But you are tired of being broke. And you want to cash in on this information. Your wife is pregnant with your fourth child and you are flat broke and barely surviving. And so what do you do?
Well, you do what most of us would do…you then raise as much money as you can and begin shorting the stock and buying put options (these gain in value if a stock price declines). You then tell your parents, and they also do the same. And then your parents tell their siblings, and they also do the same. And now your aunts and uncles tell their best friends and on and on it goes.
Your accountant realizes that it’s securities fraud and he also realizes that if he attempts to short the stock, this trade will likely be traced back to him. People will wonder why an obscure accountant purchased $500k in Put options from the money he obtained by taking out a mortgage on his house. And so, your accountant takes the $500k and opens an account at a reputable CFD broker located in London. He then places a massive short trade, betting that the stock will crash within 4-weeks.
The accountant then secretly forwards the damning information to the SEC, the New York Times, the Richmond Times-Dispatch, and The Roanoke Times. A short time later…boom, an article appears claiming that the CEO of the company was actually nearly bankrupt, he lied on his financial disclosures to the IRS, he lied to nearly everyone. And he was a pervert that liked to watch random men have sex with his wife. All looks terrible.
The stock crashes from $80 to $4 in the blink of an eye.
All of the friends and family of the meager assistant of the supply chain manager reap a huge financial windfall. Everyone is happy.
Except for the CFD broker located in London is not very happy. Remember, a CFD broker (like Meir Barak) is only a financial “bookie” and he is the counterparty that must pay his losing bet to the accountant. The CFD broker then tells the accountant to “go fuck yourself” because they suspect that this US based customer actually had insider information on this company. And they were correct. The accountant did have insider information.
Of course, the accountant is now very upset and wants the London based CFD broker to pay him the $3,000,000 that he is now owed. So the accountant files a complaint with the CFTC or Commodity Futures Trading Commission because they are the regulatory authority in charge of protecting the US-based investor. The CFTC investigators then become suspicious and start to put together the threads.
A short time later, the FBI shows up at the door of the accountant and starts asking questions. The accountant then hires a lawyer and a “proffer” agreement is obtained where the accountant can divulge any and all information that he knew about the impending disaster at the publicly traded company. And in exchange, he will not be charged with insider trading or face any legal threats. He agrees.
Another week passes, and the FBI then shows up and arrests the assistant to the supply chain manager. Next, his parents are arrested. And then the parent’s siblings are arrested. And then the whole ball of yarn unwinds and everyone is forced to surrender any and all gains obtained from the insider information.
What a mess. As crazy as this all reads, this is exactly what happened in a famous case. And there are many more that I can cite too.
And so, the Dodd-Frank regulatory act sought to fix this problem by banning CFD trading any and all US citizens. Precisely because US citizens were trading on insider information in foreign jurisdictions, on unregulated platforms…such as what Meir Barak is currently offering. CFD trading is a felony in the United States, and for good reason. We cannot have the most robust and transparent financial system in the world without a strong regulatory function that protects investors from shady shit.
Was this a victimless crime? Surely, this is what you will argue. But this was not a victimless crime because investors purchased the stock based upon the forward earnings. And now they have lost their entire investments. Additionally, many pension funds, mutual funds, and ETF investors were also greatly affected. And the real estate investors and the local economy in Newport News, Virginia, were also affected. Walmart and Costco pulled out. The local economy slumped.
Are you now seeing the bigger picture? This is not about you, and your $250 CFD account at TradeNet. This is really about keeping all parties transacting on the same regulatory framework. CFD brokers are bookies, they are not, and were never meant to be “shadow markets” where illegal information is traded upon.
Ask yourself this…if you had insider information and took a million dollar short position based upon your insider information…do you really think that Meir Barak is going to pay you? He will not. Contained within his disclosure documents is language where, is he suspects insider trading — he can simply tell you to pound sand. You will have no recourse.
This was a long reply. I hope you can understand, and I expect that you would agree at some level.
I had no idea that that is how a CFD broker functions. They are almost as scummy as an offshore Forex broker.
Yep, CFD brokers are just bookies that operate over the internet.
And the problem is that since they control the “vig” then they can unilaterally widen spreads which act as a speedbump that chips away at the profitability of any counterparty. You cannot do this with a traditional brokerage, they have no incentive to see you lose.
Another problem with CFD brokers is the issue with dividends. As Meir Barak is well aware, (he was sued in Israel) that CFD’s pay no dividends. A lady in Israel opened one of his “magical” trading accounts with the intention of investing in high quality, dividend producing stocks to supplement her retirement income. After about a year, she noticed her account was NOT being paid the dividends and she becomes increasingly confused and did not understand what was happening. Was that utility company no longer paying a dividend? Why didn’t she get her dividend across her entire portfolio?
Well, after a very long time of her money sitting there holding all of these stocks…she eventually catches onto the fact that Meir was not paying any dividends because it was all just a “magical” casino!
Know your facts,
Same like the USA, CFDs are illegal in Israel.