You are launching your FX trading career and have stumbled upon the London Capital Group (LCG). The website looks credible and you like their fees and services. LCG has a tier-1 jurisdiction license and an additional tier 2 license. You are ready to deposit your cash with LCG and kick off a successful trading career.
However, hold your horses. A licensed trader like LCG might be safer to trade with, than an unlicensed trader. Regulatory oversight however cannot cover all the loopholes that fraudulent brokerage firms, use to frustrate the hardworking trader. Regulation, therefore, does not imply high trust levels.
A licensed trader under robust regulatory enforcement will, for instance, pay you if they go bankrupt. Expert traders however know that there are other risks to watch out for. You should for instance factor in the financial strength of the broker that you intend to trade with, before handing them your hard-earned money.
Information on your broker’s liquidity providers is vital to ensure that your firm of choice survives even the most extreme of FX trading market conditions. You should also Google various review sites to ensure that the broker is not using questionable or unscrupulous laws in its terms and conditions of trade to fleece its customers.
Many FX traders have fallen prey to shady brokers in the market. If you have lost your trading capital to unethical traders, book a free consultation with us, and we will chart a wealth recovery journey with you.
Is LCG a trustworthy broker?
Every skillful forex trader knows that the market does not give easy wins. It however can deliver massive losses quite easily. You, therefore, do not want to entrust your money to a broker who is set to see you lose. You will waste too much trading time and energy ensuring that your broker is not ripping you off.
To trade FX successfully, you should instead focus all your efforts on studying the market and making the right trading decisions. Going by the LCG reviews online, most LCG traders spend more of their time tussling with this untrustworthy broker, than they do trading.
LCG reviews from credible review sites like Forex Peace Army and Trustpilot paint a very negative view of LCG. Below are a few examples of claims levied against this broker.
- Traders claim that LCG will withhold capital and profit, should a trader decide to make a withdrawal from their account. One exasperated broker shows evidence that the firm embezzled his funds then kicked him out and kept his winnings. This trader says that LCG used a clause in their terms and conditions to rob him.
- Other traders claim that LCG asked them to deposit funds into their accounts via credit card. Did you know that the National Futures Association (NFA) prohibits the funding of forex accounts via credit cards in the US? The NFA proposed this move to protect traders from utilizing borrowed funds as trading capital.
- While funding an account with your card is convenient, credit card debt is also expensive. If you are going to use expensive debt to run trades, you will not make much profit in the end. One other risk of supplying your card’s details to a broker is that an untrustworthy broker could use the financial information for fraud and identity theft.
- LCG reviews also show that the firm could be blacklisting perceptive traders that decline to supply personal data when opening accounts. This practice is discriminatory, illegal, and abusive.
LCG is not a credible FX brokerage firm
One major reason why day traders choose LCG is that the firm is not a greenhorn in the business. London Capital Group was founded in 1996. The Contracts for Difference (CFD) and forex trading firm has a Financial Conduct Authority (FCA) license number 182110.
LCG (Cyprus) also has a Cyprus Securities and Exchange Commission license number 341/17. At the very top of their website, LCG has placed a warning on the dangers of trading complex instruments. They clearly warn that 76% of traders will lose their cash when trading CFDs with LCG.
Since, LCG is asking all traders that open accounts with them, to be aware of the loss-making nature of the trade, any new trader will easily assume that they are a trustworthy broker. Their licenses with the FCA and CySec also seem legitimate.
News surrounding this firm however paints a rather grim future for the once-mighty firm. Did you know that LCG was once upon a time a publicly-traded entity? In 2018, the London Capital Group shares were suspended from the NEX Growth Market. The suspension came about after LCG failed to publish its end-year financial reports on time.
The suspension however was a culmination of a downward spiral in business decisions, which have left LCG on its death bed. The cracks in the once formidable outfit began to show when its top managers left LCG in a huff. The retail FX firm then hired executives from the ACFX, whose CySec license had been suspended over among other accusations, tardy funds withdrawal practices.
A little while later, more of LCG’s experienced sales staff and managers left the firm as queries over the level of regulatory fees paid to LCG began to creep up. LCG acquired by GLIO in 2014, had hired top-notch business talent who it could not keep. As an illustration, both Arman Tahmassebi, a COO at IG Group, and Francois Nembrini, an MD at FXCMPro, left LCG after a one-year stint at LCG.
In 2018, Charles-Henri Sabet, its Chief Executive Officer stepped down putting a huge dent of the firm’s corporate image.
LCG review: the final word
When researching a forex trading firm’s background, always check on its user reviews as well. Independent review sites have comments from real users so they will give you an overall picture of the kind of trading experience you should expect with your firm of choice.
When reading reviews, look for trading patterns in the complaints. Is there a recurring complaint on most negative reviews? This LCG review shows that the firm has an ongoing account and withdrawal management problem, which has led to fraudulent losses of trader capital and profits.
You should avoid untrustworthy firms like LCG. If you have already lost your money to LCG, book a free consultation with us. Our years of experience in wealth recovery can help you get your money back.