The world of proprietary trading continues to evolve, but not without controversy. This week, we examine the latest developments, from major lawsuits to prop firm alerts. Let’s break it all down.
Apex Trader Funding Faces Legal Action from Co-Founder
Apex Trader Funding, one of the largest names in the prop trading world, finds itself embroiled in a high-stakes legal battle. Leo Riot, a co-founder and former CTO of Apex, has filed a lawsuit claiming the company breached their technology licensing agreement. Riot alleges that after his departure, Apex continued to use his proprietary software while withholding agreed-upon payments totaling over $18 million.
Riot, who developed the technology that powers Apex’s trading infrastructure, claims the company initially agreed to pay him 33% of their net profits. Despite this, Riot states Apex has failed to make any payments since July 2024. He revoked the software license in October, but Apex allegedly continues to operate with the technology, raising questions about the firm’s compliance and future operational viability.
Adding to the drama, Riot accuses Apex of intentionally removing monitoring safeguards from his software and blocking his IP address, signaling a deepening conflict. A March 5 hearing will determine the case’s next steps, including whether Apex can legally continue using Riot’s technology.
For traders currently partnered with Apex, this case raises critical concerns about the firm’s stability and long-term viability. While the outcome remains uncertain, the implications could reshape the firm’s operations—and the broader prop trading landscape.
Prop Firm Warnings: Scam Alerts and Questionable Practices
This week also brought heightened scrutiny on smaller prop firms, with several flagged for concerning practices. Futures Elite, for instance, faces allegations of aggressive upselling and payout reductions tied to specific account tiers. Traders have reported being charged even after canceling accounts, leading to calls for greater caution when engaging with such firms.
The Funded Futures Family, a newer player in the industry, has also faced criticism. Concerns include potential conflicts of interest as the firm allegedly combines educational services, trading signals, and account sales—a mix some experts see as problematic. Additionally, complaints about questionable trade strategies and improper account charges have surfaced, placing the firm under further scrutiny.
While not all firms operate unethically, traders are reminded to thoroughly vet platforms and review their policies before committing funds.
Shifts in Prop Trading Technology and Leadership
As the industry evolves, technology remains at the forefront. The Apex case highlights the critical role proprietary software plays in the success of prop firms. Without reliable technology, firms risk operational disruption, as seen in Apex’s current predicament.
Leadership dynamics also come into focus. Apex’s ongoing litigation stems partly from a shift in leadership when co-founder Daryl Martin handed operational control to John Skelton in 2021. Allegations of poor decision-making and questionable hires under Skelton’s tenure further complicate the firm’s image.
These developments underline the importance of transparency and ethical practices in building trust within the trading community.
Final Thoughts
The prop trading industry is navigating turbulent waters, with lawsuits and ethical concerns shaking investor confidence. For traders, the lessons are clear: prioritize due diligence, stay informed, and choose firms with a track record of transparency and fairness.
As we await the March hearing in the Apex case, its outcome may serve as a litmus test for accountability in the rapidly expanding world of proprietary trading. Stay tuned for updates on this unfolding story.
