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Forexquant is wishing everyone a great new year and a joyful Christmas. 
I hope you’ll have a great holiday while I’ll have to gather with my branch managers, conducting a year-end meeting this week in Jakarta. 
We’ll be shaping up for a brighter future. Good luck to us!
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In a pdf file found in CFTC website (court complaint details document), it is stated that the deficit is now only a $3 million (as of December 13, 2007). This means that a nearly $8 million were coming during the period between Dec 7 to Dec 13. And still several days before the hearing on Jan 4, 2008.
Good luck to us 
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CFTC’s number: as of December 7, the adjusted net capital deficit is $11.6.
But, according to several clients who contacted FXLQ for updates on the situation, there has been several million dollars incoming wires into FXLQ’s account at US banks/FCM since the MRA took place. We don’t have any numbers on how many millions they are actually.
Here is the complete copy of the press release on December 19, 2007:
Release: 5426-07
For Release: December 19, 2007CFTC Sues Futures Commission Merchant Forex Liquidity LLC Alleging Undercapitalization in Excess of $11.6 Million
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) announced today that on December 13, 2007, it sued Forex Liquidity LLC (Forex Liquidity), a registered Futures Commission Merchant (FCM) in Santa Ana, California, charging it with being undercapitalized in excess of $11.6 million and also with failing to maintain required books and records.
On December 14, 2007, the CFTC won an asset freeze and other emergency relief that will enable the Commission to freeze the remaining assets of Forex Liquidity and safeguard the interests of its customers.
According to the CFTC complaint, as of November 30, 2007, and perhaps earlier, Forex Liquidity’s net capitalization was below the minimum required by the Commission. As a Forex Dealer Member of the National Futures Association (NFA) offering to be the counterparty to retail customer foreign currency transactions, Forex Liquidity is required to have a minimum adjusted net capital of $1 million; instead, according to the complaint, as of December 7, 2007, it had an adjusted net capital deficit of approximately $11.6 million.
Forex Liquidity is also alleged to have been unable to produce required financial documentation regarding its assets and liabilities. For example, according to the CFTC’s complaint, Forex Liquidity represented in reports and discussions with NFA that its assets at one time included a $35 million ABN-AMRO bond located in Switzerland. The complaint further alleges that Forex Liquidity represented to the NFA that the ABN-AMRO bond (or its proceeds) were transferred to a U.S. registered broker dealer, Commonwealth Financial Network (CFN); however, CFN does not have an account for Forex Liquidity and the account number that the defendant provided to NFA was fictitious.
Accordingly, the CFTC also charged Forex Liquidity with failure to maintain books and records of its business transactions, specifically, current ledgers that accurately reflect its assets and liabilities.
In the ongoing action in the U.S. District Court for the Central District of California, the CFTC seeks an order of permanent injunction against the defendant, monetary penalties, and other relief. The Honorable Cormac J. Carney, U.S. District Judge, issued the restraining order freezing the assets of Forex Liquidity and prohibiting the defendant from destroying documents or denying CFTC staff access to books and records.
The CFTC appreciates the assistance of the National Futures Association in this action.
The following CFTC Division of Enforcement staff members are responsible for this matter: Peter Haas, Richard Foelber, Paul Hayeck, and Joan Manley.
Last Updated: December 19, 2007
Hopefully, we’ll get more facts in the hearing scheduled for January 4, 2008. If they’re good numbers, some other FCMs might be interested in buying the business. In that case, an approximately 1 month would be needed to complete the whole process and we’ll be able to resume trading on our clients’ accounts.
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Here is an email FXLQ sent to our client.
We’ll be waiting for the hearing in the District Court on January 4, 2008.
Tuesday, December 18, 2007
RE: Account # 1xxxxTo our Valued Clients:
We have temporarily suspended operations due to a Commodity Futures Trading Commission lawsuit filed against the company in Federal Court. Please be assured that as soon as we are able, we will return any messages.
There is a hearing in the U.S. District Court scheduled for January 4, 2008 where we hope to resolve all issues the CFTC has with our company.
Thank you,
Forex Liquidity LLC
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Several short term trading systems we have been developing for the FX market relays heavily on the distinctively unique and consistent nature of volatility behavior between market’s sessions.
We even haven’t found any ways to substitute our time-constraint filters with something purely derived from price-only data. It’s like we actually have a different kind of market for each session that is divided by a rigid time mark, not by some hints those can be found in price action.
This has been bringing some serious thought for us, because we thought that we have to stick to our philosophy to relay our systems purely on price action. But then we realize that the market has the dimension of time along with the dimension of price.
And to our surprise, I found this interesting observation by Mr. Steenbarger, Ph.D. In one of his post today in his blog, he stated a similar conclusion as ours:
What we can see is that these seem to be different markets. Indeed, the daily correlations among the three range from .12 to .18, suggesting that what the market does during one time period is only very weakly related to what it will do in the next one.
Although his research is about the stock market, particularly the S&P, this has put us into believing that time dimension is very truly exists, as we also been observing the same phenomenon in the FX market.
This confirmation from Mr. Steenbarger’s research has put a new item to our research agenda, that we will need to check market’s average range for each session. This would probably be useful for developing a better opening range breakout model, by having a better measurement of the opening range width. And for our range trading model, we might get a better basis for the entry and exit strategy. The keyword would be determining the historical and average range of sessions.
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Some interesting ongoing discussions in FF Forum, at page 3, page 4, and 5 of a thread regarding the recent MRA to FXLQ.
Some points in the discussion:
Still, all we can do is just wait for things to unfold and observe any news and rumors. lol.
Anybody wants some beers? 
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Early today I received a PM from one of my online buddy, asking about the money management we use in our trading. I agree that this topic is a very important aspect of trading.
We generally have 3 kinds of money management:
There are many sources regarding this matter. Using an “Optimal F” should be interesting to be tested, as proposed by several authors. But to this date, none of our systems use this kind of MM. It’s a very interesting one, tho.
I hope this is clear. please spark more question if there’s anything else I could answer, or you might have some suggestions for me. Thanks in advance.
Meanwhile, I’ll have a cup of coffee. 
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After the upside-down in the Metatrader brokerage business following the new regulation regarding minimal capital requirement of FCM took place, bigger corporations have started to adopt MT4. Perhaps they start to realize the magnet of MT4 in attracting a significant portion of the retail trader customers.
Among several big names we know who adopt MT4 are FXCM and RCG (Rosenthal Collins Group). FXCM is still planning on this move, it is said to be ready in 2008, if there is enough interest in it.
Meanwhile, we’ve been demoing RCG’s MT4 for several days now. They have a sub-pips spread. As we can see here in the tick chart screen shot below, EUR/USD was traded with a sub-2 pips spread during London/European session:
This information below is taken from tradeviewforex’s website:
But still, we’re looking for a UK-based MT4 broker now.
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We have just received this notification regarding automatic rollover of open position.
Although we have been inactivating our robots since we received the MRA news on December 4, it is good to know that their dealers are still doing their job.
Wednesday, December 05, 2007
RE: Account # 1XXXXDear Valued Client:
Please be reminded that your FXLQ Customer Agreement provides for automatic rollover of positions which are not closed during the course of a trading day.
Due to the recent Member Responsibility Action issued by National Futures Association, we are requesting that all clients inform us immediately if they wish to revoke this ongoing assent to automatic rollovers.
If you choose to revoke this ongoing assent to automatically rollover positions, they will be liquidated at market at the end of the trading day, unless you contact us each day to direct us to rollover your open positions during the trading day.
Best Regards,
Forex Liquidity LLC
And up to now, the MT4 client platform is still well connected to FXLQ server, providing live quotes uninteruptably, and the balance of our clients’ funds are still the same as it were.
Maybe they haven’t processed our wd requests yet, but all these facts add more confidence regarding the safety of the funds.
More updates later.
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We have just received an update from our contact. It is said that there are two NFA officers in FXLQ’s office today, supervising the process of fund withdrawals to make sure it goes properly. This should add more confidence for a clean finish on this matter.
I need some fresh air. Still holding my breath, tho.. 
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Perhaps it’s the coldest one. Because i can even feel it from here when having this conversation with my contact. I hope things are going well.
Darma: dear P, if you hear any news pls let us know. thanks
P: I will
P: did you send the form?
Darma: yes we have sent the form
Darma: in the case document, i saw this that makes me worry:
“FXLQ is prohibited from distributing, disbursing or transferring any
funds, including to existing customers, without the prior approval of
NFA.”
P: You should have the funds in 3 days
P: from today
Darma: wouldn’t be any delay because of the need for NFA approval for each transfer of money?
P: I don’t think so
P: your money is seperate from the firms money
Darma: and P.. I and my client still trust you. if you have any suggestion on brokers we should choose, pls advice
P: ok , thank you
P: I’m sorry about what happened
P: I will call FXLQ again later
Darma: thank you. i hope we wont get any delays.
Darma: this makes me nervous, actually
P: there shouldn’t be
P: I’ll call later
Darma: you know better the regulation and the situation there.
Darma: yes, please let me know anything you can get.
P: it also happened to One World Forex
Darma: btw, how are you? it is winter there, isnt it?
P: they are cracking down
P: yes
P: COLD
P: I don’t like the cold
P: how about you?
Darma: do you have plan for christmas or new year?
P: no
Darma: im fine, except with this fxlq thing. my multifinance business is going well. as well as the chemicals
P: not yet
P: good for you
P: I need to shower now
Darma: ok P.. good luck to us!
P: you’ll be fine
P: I’ll call them later
P: and make sure
Darma: ok thank you
Darma: thanks.
I prefer spring over winter
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We have just received this notification letter from FXLQ.
I immediately discussed it with our clients and we decided to send a withdrawal request.
The completed forms have been sent several hours ago, and we’ll see hows it gonna be.
Wish us luck!
Tuesday, December 04, 2007
RE: Account # 1XXXXTo our Valued Clients:
The National Futures Association has today issued a Member Responsibility Action against FXLQ. You can find the notice on the NFA’s website: http://www.nfa.futures.org/basicnet/Details.aspx?entityid=0362216&rn=Y.
Effective immediately, FXLQ is not allowed to take on any new customer positions. Therefore, all of our systems have been set to allow only rollover and liquidations.
We apologize for any inconvenience this has caused, and direct you to our website if you wish to withdraw your funds: www.fxlq.com/docs.
We are working diligently to clear this up as quickly as possible and look forward to renewing a full relationship with our customers.
Sincerely,
Robert Gray
President
Forex Liquidity LLC
And now we need to find a good UK-based MT4 broker to tap our robots in.
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(picture is taken from offthemarkcartoon)
This is my note I wrote last year. It was about the correlation between poor macroeconomic figures and the poor role of the profession of pharmacist in Indonesia that then leads to the lack of public appreciation to the profession. I think it might be worth posting it here.
Mr. Pharmacists, just Stop Blaming Others and Yourselves!
Around 10 years ago, during my study in the university, I involved myself quite deeply in the student organization, especially in the field of the professional role of pharmacist in Indonesia’s health care system. Since that time until now, it has been a common topic among pharmacists and pharmacy students that the profession of pharmacist in Indonesia isn’t appreciated as good as it is in other countries.
Discussions sometimes led to the blaming of other professions, especially doctors, who are said to be taking over pharmacists’ role in the health care system. Doctors dispense medication to patients to get the benefit of the business, or even the full of corruption practice of drug prescription by doctors who seek to get direct benefits from pharmaceutical industries such us bonuses, prizes, sponsorships, etc.
Some discussions also lead to the blaming of the lack of a proper regulation on the national health care system. Then it blames the absence of pharmacist in the parliament and other strategic position in the government.
All these, then lead to useless bashings, debates, and also (useless) efforts to make the better appreciation of the profession of pharmacist in Indonesia.
I too, once tried several efforts at that time during my study time in the uni. Joining with other peers, we successfully started the weekly radio talkshow by pharmacy students in the hope of the better appreciation to pharmacists by the public. The program is now still running and formalized in the student organization. I’m happy for that. And we also pioneered the internship session for students during holiday session in several pharmacies and industries arround Bandung. This was hoped to give an earlier exposures to pharmacy students to the reality of their profession in the community, compared to the school programs to do the thing at the very end of the study time. Then we encouraged other fellow students to get an early involvement in the pharmacist profession organisation (ISFI), attending discussions and seminars, and we even organized a national seminar to take a closer look at the possibility that the curriculum and the regulation on the education themselves lack somethings that leads to the problems.
But, after all those efforts and thoughts, I then realize that such things won’t generate significant effect for the better role of pharmacists in Indonesia’s health care system. I then realized the the country’s poor macroeconomic figure is the cause. This has been the fundamental cause of it.
Take a look at Indonesia’s current GDP per capita. The number is arround USD 1,600. Even if this figure is normalized with the cost of living, that will result in the number of GDP(PPP) per capita of USD 3,900-4,500 (variable numbers resulted from various methods by various insitutions), this number is way too low compared to countries with acceptably proper role of pharmacist in their health care system.
For example, United States and some European countries, where the profession of pharmacist is considered to be a role model by idealists, have their number between USD 25,000 – 40ks. That is a well 10-20 folds of Indonesia’s. Even Malaysia and Singapore have USD 12k and 30k respectively. Thus I think comparing the role of the profession of pharmacist in Indonesia with what they have in those countries would be absurd.
I do really appreciate and respect my fellow pharmacists who dedicate their fullest effort for a better situation and some have really gained appreciation in several working environments.
But, by realizing at this fact, idealist pharmacists in forums and discussion boards should have a more realistic view on the problem. You wont open an authorized Mercedes-Benz service center in a poor village and then expect villagers to treat you as an important person in their life there, will you? They use motorcycles, for rice shake! Trying to convince the villagers to buy Mercedes sedans because it is good and provide a safer mean of transportation would lead to frustration.
I welcome any comments and feedbacks on this.
Rgrds.
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