Another one bites the dust: SurgeTrader shuts down as new clouds
The first round of troubles for the prop industry came earlier this year, when in February MetaQuotes, the developer behind MetaTrader 4 (MT4) and MetaTrader 5 (MT5), initiated a significant crackdown on proprietary trading firms using their platforms, particularly targeting those that operate without proper regulatory compliance and serve U.S. clients. This has meant that the affected prop firms have had to look for ways out to continue their operations, either by building proprietary solutions or migrating to other platforms. One such platform which many resorted to and which has since come to be considered a safe have for prop firms, is Match-Trader.
However, as of Friday, May 24, clouds have started gathering over the prop trading landscape once again, since popular firm SurgeTrader has suddenly announced, via posting on its website, that it has ceased all operations, leaving many traders in shock and awe. The plot twist is that SurgeTrader has blamed this shutdown on Match-Trade Technologies’ decision to terminate SurgeTrader’s platform license and their refusal to seek a solution to this. “It is with deep regret that we announce that as of today, Friday, May 24, 2024, SurgeTrader has closed and ceased all operations. Despite all of our efforts this week to get Match-Trade Technologies to further communicate to resolve our trading platform termination, we have been unsuccessful.”
What is most surprising in this case is that up until very recently, SurgeTrader had enjoyed a favorable reputation among its users, with traders commending the prop firm for its user-friendly approach, including the flexibility to hold trades overnight and over weekends, and its clear, straightforward rules. The company’s responsive customer service and efficient payout process were also highlighted positively by its community. All this until Match Trader decided to pull the plug on SurgeTrader’s license.
The prop firm’s initial reaction was to call this action “unwarranted and harmful”, further asserting that the platform provided had no justification to proceed with such a move and further alleging that the decision was influenced by a “well-known third party”. Moreover, in its initial reaction, SurgeTrader was adamant that all accusations against it and its owner were both unwarranted as well as unfounded. Match-Trade Technologies on the other hand, said the termination was a result of its standard compliance procedure and the consequent failure of SurgeTrader to “meet the formal requirements outlined in our agreement."
According to Match-Trade "The termination notice was issued on April 5 and will take effect on June 30, allowing the company three months to migrate to a different platform, thereby minimizing the impact on trading activities." Despite the June 30 deadline mentioned initially, the fact is that before the end of May SurgeTrade has officially ceased all operations. The thickening of the plot seems to be related to a story that has been lingering about for some time.
SurgeTrader has recently been implicated in a controversy involving a Ponzi scheme. More specifically, Brent Seaman, the husband of SurgeTrader's CEO, Jana Seaman has been charged by the SEC with orchestrating a $35 million Ponzi scheme that operated from June 2019 to September 2022. This scheme targeted elderly church members, promising them high annual returns of 18-48% on investments in commodities, currencies, and tech startups. Instead, funds from new investors were used to pay off earlier investors, a classic hallmark of a Ponzi scheme. Additionally, substantial amounts of money were misappropriated for personal luxury expenses, including cars and private plane trips.
The SEC's legal actions against Brent Seaman included fines and orders for disgorgement payments. These actions aim to recover misappropriated funds and provide some restitution to the victims. While the Ponzi scheme primarily involves Brent Seaman, the association with VALO Holdings Group and Jana Seaman has raised concerns, especially given the involvement of VALO Holdings in facilitating or being connected to the scheme in some capacity.
Indeed, the legal scrutiny and public attention due to the Ponzi scheme have undoubtedly impacted the firm's reputation and raised questions about its internal oversight and association with Brent Seaman's fraudulent activities. While these developments have not directly implicated SurgeTrader in operating the Ponzi scheme, the association and financial ties with Seaman and VALO Holdings may well be behind the prop firm’s sudden demise in such an abrupt manner.
What this development also proves once again is that prop firms are faced with many challenges and that the overall prop trading landscape is still undergoing changes and disruptions as it keeps moving away from regulatory grey areas. It appears that platform providers will continue to enforce stricter control over their software to avoid potential legal issues, proving their commitment to ensuring that all brokers and firms using their platforms adhere to compliance standards.
This new trend highlights the current critical importance of compliance and regulatory adherence in the prop trading sector. It is also a testament to the fact that the ever-evolving regulatory landscape requires prop trading firms to stay vigilant and explore compliant trading platforms to avoid future disruptions, while those who try to avoid compliance rules will be thrown out. What all this means is that the traders and firms affected by these changes should remain updated on the latest developments and consider alternative platforms that ensure compliance with regulatory standards.
Besides, as a prop trader, your choice of firm significantly impacts your success and security in the market. Therefore, it's crucial to partner with firms that prioritize integrity, transparency, and adherence to regulation. Reliable prop firms not only offer a stable platform for trading but also provide a supportive environment for your growth as a trader. By choosing reputable firms, you gain access to robust risk management systems, cutting-edge technology, and valuable resources that enhance your trading experience.
Transparency is also key in the world of prop trading. Trustworthy firms are upfront about their fee structures, trading strategies, and performance metrics. This transparency fosters trust between traders and firms, ensuring that you can make informed decisions about your investments.
Regulation serves as a cornerstone of stability and protection in the financial industry. Prop firms that are regulated by reputable authorities adhere to stringent standards of conduct and accountability. By aligning with regulated firms, you mitigate the risk of fraud, malpractice, and other unethical behavior, safeguarding your capital and reputation.
In summary, prop traders should prioritize partnering with reputable, transparent, and regulated firms. By doing so, you not only enhance your trading experience but also mitigate risks and safeguard your financial future. However, in the unfortunate event that you find yourself a victim of a firm that goes bust or is forced to shut down, taking away your hard-earned profits or capital, do seek help and guidance to safeguard your rights.
FAQs on SurgeTrader Closing Down
Why SurgeTrader has closed and ceased all operations?
Why Match-Trader Terminates Prop Firm SurgeTrader's License?
How SurgeTrader has recently been implicated in a controversy involving a Ponzi scheme?
So which Proprietary Trading Firms are better than SurgeTrader? Want to jump straight to the answer? FunderPro is the best alternative Prop Firm to SurgeTrader for September 2024 .
