Northsea Forex Group (NSFG) is closing down
September 3, 2007
Northsea Forex Group (NSFG)'s tumultuous year ended this week, with administrator Paul Twyman announcing that the company is closing down.
After months of profit hits and misses and allegations of money laundering from their previous broker, NSFG sent today an email to investors explaining that their forex broker issued them a margin call and that their forex account had been wiped out.
Full text of the NSFG email here.
I was hoping that I would never have to send an email like this, ever!
However, I returned from being away at the end of last week to discover the turn of events that many of you are now familar with.
To summarise what has happened, following the market crash a few weeks ago our brokers were forced to change there margin requirements as so many of their clients were hit very very badly by it, we at that point were not really involved.
However the following week on the Tuesday we experienced a drop in equity from a few trades being stopped out and also some clients withdrawing their funds. As at this time we had everal open positions that were negative and this drop in equity forced the brokers to Margin Call the account. A post from Ken is below giving a brief outline:
Yesterday evening our broker in London, BGC, made a margin call on all our accounts after a drop in equity made it impossible for us to maintain the large open negative positions we have been holding for a while. It forced us to liquidate all open market positions, including both arbitrary trades and the hedged position for an all out loss. The large negative P&L had been built up as the global equity markets plummeted following the serious credit concerns and it caused a major unwound of the carry trades, not only in the Yen pairs but also in the Swiss Franc crosses. Attempts to trade around these arbitrary positions failed and we are forced to close down the company following this margin call since we have no liquidity left. Hundreds if not thousands of hedge funds and investment firms around the world have severely suffered from this global incident and we regret not to have been able to pull ourselves through the credit crisis unharmed.
This liquidation has serious consequenses for everyone involved. Personally, I have lost my own private trading account and are now forced to sell my house and liquidate my personal assets to be able to cover expenses until I can move and I will most likely end up with a serious amount of debt to banks and credit institutes. Along the way NSFG has been confronted with obstacle after obstacle and although we have tried our very best to stear clear of these obstacles, this last financial crisis killed our dream. There is no way we can regain what has been lost and the sensible thing to do is pull the plug now and get things closed down for good.
Ken, on behalf of NSFG Ltd
There is not really much I can add to this, other than to express our extreme regret at this situation, for nearly 2 years we have put everything into Northsea, and now we have nothing. As you can see from Ken's post he is forced to sell his house to simply survive, and my own situation is not any better. I now have to sort everything out my end to do much the same as this was not something that we planned for so everything we had was in the company, and now there is nothing.I want to make sure everyone is clear on this point, The pool account was totally wiped out, in fact I think because of the nature of the way the accounts were set up we had to actually give the brokers more money because there was not enough in it to cover the loss. This was because it had a few extra positions than the managed accounts so when it was called, it was liquidated completely.
I know this is not what you want to hear, but there is absolutely nothing that we can do now other than to close the company, because quite simply there is no company left to run.
I am very sorry for all of this, and am personally still in a state of shock over it, but it has happened and has effectively destroyed both Ken and my owns life right now.
I truly do wish you luck in everything you do and can only express my own personal regret at all of this. I don't think that Ken or myself will be online much over the coming weeks while we try our best to sort out our lives offline, so emails etc may not be answered for a bit.
Yours in regret,
Sad day for all NSFG investors.
Discuss NSFG in the HYIP: Northsea Forex Group (NSFG) thread in the PMT Forum.