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Dustin Pass's Managed account Scam

Discussion in 'Scam Alerts' started by educatedwarrior, Apr 23, 2008.

  1. educatedwarrior

    educatedwarrior Private

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    Felix and FPA,
    I really need your help and advice. I believe that I am being scammed by Dustin Pass's managed account service. I was wondering if you could let me know if I have any options.

    I originally opened a managed account at Interbank FX (IBFX) with $9000. The first month the account made 20% - however 50% of the profit went to Dustin Pass - that was the deal. I thought that was a good deal - 10% in one month.
    So a couple months later, I did something I may regret for the rest of my life. I borrowed money to deposit into the account - I thought to myself, this guy knows what he is doing - at this point he was making hand over fist. I was thinking if profits keep rolling in at this rate, I could pay off my student loan balance, which has not decreased in over 10 years. I borrowed money from a credit card and deposited $45000 more. This brought the balance of my account to approximately $55,000.
    The year ended. $20,000 was made on the account. I took profits and left about $40,000 in the account. All of the sudden, the account was being managed differently. Instead of getting into positions and holding them for a couple weeks to a month, Dustin Pass started holding on to positions longer than a month. Before, if a position broke out of a resistance or support level - he would use hedging tactics. All of this ended.

    I sent some emails back and forth asking them what the problem was. They said they were not getting proper trade execution at IBFX and blamed it on them. They said they were having meetings with IBFX to resolve the issue - the issue never got resolved.
    In Dustin's live trading room, some people were complaining that they were getting margin calls in the managed account. Dustin sent out an email saying that IBFX has some allocation issues and he was having meetings with them to resolve the issue. The issue was never resolved. I called IBFX and they basically said if there were ever allocation issues they were taken care of - however my account is taking a bigger loss than the managed account. Nobody is taking responsibility for improper management of my account. At one point the managed account was -20% and my account was -80%.

    Today my account is -$36,000. My total margin is $51,000. I added $10,000 to avoid a margin call to my $41,000. The account fluctuates $5000 on a weekly basis. My current margin requirement is $5,000 I'm short EURUSD, EURJPY, AUDUSD, and long USDCHF. I got a couple positions in it down 1700 pips. I really feel stupid. My life my be changed from this point. Do you have any suggestions?
     
    #1 educatedwarrior, Apr 23, 2008
    Last edited: Apr 23, 2008
  2. Pharaoh

    Pharaoh Colonel

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    Wow! That truly sucks.

    IBFX has the occasional server lockup (I know this from personal experience) that can prevent a trade from being executed, but that's no excuse for leaving one open for months. Any competent account manager would issue a close trade order for all accounts and then should be bright enough to confirm that it went through.

    If they charge 50% of profits (sounds a little high - 25-30% is much more reasonable), they really don't have any motivation to crash your account. If they are serving as IB's, then holding positions longer would cut into profit.

    Thus, I can't see how they are coming out ahead by crashing your account. This sounds less like a scam and more like total incompetence. Assuming you have direct access to all of your account statements with IBFX, they can't just pocket your money and say they lost it. Perhaps whoever was the true brains behind their trading plan left, and whoever is left just doesn't have a clue.

    Do you happen to know if they are regulated? I'm familiar with some of the regulatory requirements for brokers, but don't know what is and isn't required for account managers.

    Does their website make any specific promises regarding risk management? If they pushed your account near a margin call in a few months, they obviously weren't using proper risk management.

    It might be a good idea to see if you can get in touch with someone higher up the food chain at IBFX and show that person the emails this guy has been sending. IBFX isn't 100% problem-free, but they might take issue with being used as a scapegoat for something of this magnitude.
     
  3. educatedwarrior

    educatedwarrior Private

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    I tried to contact someone high up at IBFX - the guy I need to talk to, Dale Brown, is never in the office and always to busy to talk to me. I talked to one of Dale's subordinates and he told me any issue with allocation has been resolved and if I have any other issues talk to my account manager (Dustin Pass). I've called Dustin Pass's phone number but they never call me back.

    So it's a case of Dustin Pass blaming it on IBFX saying they did not allocate the trades properly in my account, and IBFX is saying that allocation issues have been resolved. In the meantime, my account allocation is at least 3 times more than the managed account - I'm taking unnecessary risk. At times I wonder if Dustin Pass and IBFX are working together to steal people's money - using some bad guy good guy con tactics. Overleveraging people's accounts and hope they receive a margin call.

    This is one thing that really pissed me off. One day I was in one of Dustin Pass's live trading sessions for his RSS tool, and he was bragging on how much the managed account was making, based off a couple trades. Meanwhile my account was down %60. I had positions down 1700 pips. I started sending him instant messages telling him about my account loss in the sessions. Soon after he noticed some of the people in his live trading sessions were people with big losses in their accounts, he stopped talking about managed account performance in live sessions completely.

    His service is not honest - I don't see how he sleeps at night.

    IBFX is regulated by NFA. Maybe I need to put in a complaint there.
     
  4. Pharaoh

    Pharaoh Colonel

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    What's the website for his managed accounts? I found one site for him llisted in FPA's reviews, but it looks more like a live trading room than a managed account service.
     
  5. educatedwarrior

    educatedwarrior Private

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    Here is the website.
    Managed Accounts.

    You have to send an email in order to get more information about how the managed account works. Basically, you open an account at IBFX then you fill out forms to give Dustin Pass authorization to trade your account.

    The name of his managed account company name is FXDealerSelect. It used to be another name but it changed at the beginning of the year and I had to resubmit new authorization forms.

    Dustin Pass uses his the RSS service Live Trading Sessions to lure people into opening a managed account. I saw first hand how much money was being made in the Live Session. One guy made 60 pips off 16 standards lots one time - which was announced by Dustin Pass in the virtual room. At first, the managed account was traded off the same trades executed in the Live Room - then that changed around the beginning of the year - in addition to the allocation issues, and I started taking huge losses on my account.
     
    #5 educatedwarrior, Apr 23, 2008
    Last edited: Apr 23, 2008
  6. educatedwarrior

    educatedwarrior Private

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    Pharoah, thank you for your comments

    The main reason why I think I'm being scammed is because Dustin Pass's group has not been very helpful in resolving the issue. IBFX has not been very helpful in resolving the issue either. Is it possible that if my account gets a margin call, and IBFX's dealing desk has traded against me, Dustin Pass and IBFX could split the profits? I know it's illegal, but is it a possibility; that is the question.

    I expect whoever is responsible for improper allocation of my account, whether it be IBFX or Dustin Pass, should take responsiblity and make the corrections. Is that too much to ask for? Whenever this takes place, that would prove my scam accusations to be false.
     
  7. Pharaoh

    Pharaoh Colonel

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    IBFX has issues, but I really can't picture that they would go that far. If it was an unregulated offshore broker, I'd be more suspicious.

    Trades open for weeks or months can go up or down, so a few sudden market turns could have cost them a lot of money.
     
  8. educatedwarrior

    educatedwarrior Private

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    Pharoah, I value your feedback that IBFX and Dustin Pass may not be working together to scam me - maybe that is illogical

    However, the fact still remains that my account has not been allocated properly and either IBFX or Dustin Pass is responsible. Not one of the parties are taking responsibility to resolve the issue. Both parties could care less.
     
    #8 educatedwarrior, Apr 23, 2008
    Last edited: Apr 23, 2008
  9. Pharaoh

    Pharaoh Colonel

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    If you can't get Dale Brown on the phone, try emailing him. Give him copies of the emails from Dustin Pass blaming IBFX. Explain that if Mr. Pass's allegations are true, this might be worthy of an NFA complaint. That should get you a reaction. Also, see if you can find out who Mr. Brown's supervisor is and CC him on the email.
     
  10. educatedwarrior

    educatedwarrior Private

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    IBFX is fishy

    Now this is freakin weird. Dustin Pass's group added two trades of equal size on the audusd - shorted at .9470. Good entries I might add - after a series of sucky entries.

    Now I'm looking at my open trades and one of the trades disappeared. I looked at my transaction history to see if it was closed, and it does not appear in my history. Something fishy is going on. Did IBFX steal one of my positions? Or maybe they fixed the allocation. I have no way of proving it because I did not take a snapshot of the screen.

    I really don't have good feelings about this broker.
     
    #10 educatedwarrior, May 13, 2008
    Last edited: May 13, 2008
: ibfx, ibfx.com

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