fxdirect customers funds are held with a major money center bank and are insured using a Fidelity Bond. This will cover losses caused by dishonest or fraudulent acts committed by employees. The dishonest or fraudulent acts must be committed with the manifest intent to (a) cause the insured to sustain loss and (b) to obtain improper financial benefit for the employee. The Fidelity Bond extends to include loss caused by dishonest employees engaged in trading activity.

Another feature of the Fidelity Bond is the “Computer Systems Insuring Agreement”, which covers loss resulting from the introduction of false data or programs into a computer system used by the insured. Since the fidelity portion of the bond covers dishonest acts by employees, this portion of the bond is directed toward acts of non-employees (hackers) who may gain access to the system. Coverage would include inappropriate wire transfers.

The ‘Forgery or Alteration Agreement’ covers loss resulting from forgery of a signature or alteration involving most types of negotiable instruments. Also, losses resulting from written instructions directed towards the insured that have been altered, or bear a false signature, are covered.