NFA orders Connecticut-based Interactive Brokers LLC to pay a $250,000 fine

Regulatory and Legal News

April 14, Chicago—NFA has ordered Connecticut-based futures commission merchant and forex dealer Member Interactive Brokers LLC to pay a $250,000 fine.

The Decision, issued by NFA’s Business Conduct Committee (BCC), is based on a Complaint issued by the BCC and a settlement offer submitted by Interactive Brokers, in which the firm neither admitted nor denied the allegations in the Complaint. In its Complaint, the BCC alleged that Interactive Brokers canceled retail customer forex orders contrary to the reasons permitted under NFA Compliance Rule 2-43(a)(1) and failed to adequately supervise its employees in the conduct of their forex activities on behalf of the firm to ensure compliance with the relevant NFA requirements, contrary to NFA Compliance Rule 2-36(e). In its Decision, the BCC found that Interactive Brokers violated NFA Compliance Rules 2-43(a)(1) and 2-36(e).

The complete text of the Complaint and Decision can be viewed on NFA’s website.

Source: National Futures Association

NFA orders a Utah introducing broker to pay $80,000 fine.

Regulatory and Compliance News

For more information contact:

Christie Hillsman, 312-781-1497, chillsman@nfa.futures.org
Karen Wuertz, 312-781-1335, kwuertz@nfa.futures.org

NFA orders Salt Lake City, Utah introducing broker Member BTU Brokers, Inc. to pay an $80,000 fine

April 5, Chicago—NFA has ordered Salt Lake City, Utah introducing broker BTU Brokers, Inc. (BTU) and its principal and associated person (AP) Christopher Anthony Ridgeway to jointly pay an $80,000 fine.

The Decision, issued by NFA’s Business Conduct Committee (BCC), is based on a Complaint issued by the BCC and a settlement offer submitted by BTU and Ridgeway, in which they neither admitted nor denied the allegations in the Complaint. In its Complaint, the BCC alleged that BTU and Ridgeway failed to comply with NFA Registration Rules and failed to diligently supervise the operations and APs of BTU, in apparent violation of NFA Compliance Rule 2-9(a). The BCC’s Complaint also alleged that BTU and Ridgeway failed to observe the high standards of commercial honor and just and equitable principles of trade expected of NFA Members and Associates by permitting the registration and supervision deficiencies to occur, in apparent violation of NFA Compliance Rule 2-4. In its Decision, the BCC found that BTU and Ridgeway violated NFA Compliance Rules 2-9(a) and 2-4.

The complete text of the Complaint and Decision can be viewed on NFA’s website.

Interbank market news scan: Five thousand dollars in suspicious activity results in $200K fine for OANDA …

Regulatory news. NFA has ordered OANDA Corporation (OANDA), an NFA Member retail foreign exchange dealer and futures commission merchant headquartered in Toronto, Canada, to pay a $200,000 fine. The Decision, issued by NFA’s Business Conduct Committee (BCC), is based on a Complaint issued by the BCC and a settlement offer submitted by OANDA. The BCC found that OANDA failed to submit accurate daily forex reports to NFA and failed to supervise. News & Notices | NFA (futures.org)

Strategic takeaway. The National Futures Association’s complaint illustrates the necessity of defining and maintaining your regulatory strategic position. Although the foreign exchange market is near unregulated in terms of price setting, market entry and maintenance of entry are regulated where the goal is a balancing act between ensuring that investors/traders are availed a high degree of market transparency regarding pricing, broker qualifications and integrity, and the integrity of a brokerage platform and the dealer’s need to seek out and maintain data on best currency prices, disseminating that information to investor/traders, while controlling costs and increasing profits.

A main component of maintaining a regulatory strategic position is consistency in not only implementing your own compliance program, but in auditing its performance. For example, failure to detect suspicious activity, respond in a consistent and timely manner to customer complaints, notice red flags from wire activity, adopt written protocols for protecting against technology threats, and file required reports to the U.S. Department of the Treasury or the Commodity Futures Trading Commission are indicative of consistent auditing within an organization.

OANDA’s problem started out with a customer complaint involving an unauthorized transfer of $5,000 out of a customer’s account. The resulting $200,000 fine may have been avoided.