Retail Foreign Exchange Dealer Fined for Violating CFTC Capital Requirements

The CFTC ordered a CFTC-registered retail foreign exchange dealer ("RFED") to pay a $1 million civil monetary penalty, and to "perform certain undertakings," for violating CFTC regulations and previous orders.

According to the March 4, 2016 CFTC order (the "Order"), from January 15, 2015 through February 5, 2015, the RFED failed to (i) meet the minimum capital requirements, (ii) notify the CFTC of its undercapitalization, and (iii) diligently supervise its employees in violation of CFTC Rules. The Order also settles charges that the RFED violated a prior CFTC order entered against it on December 10, 2014.

The shortfall in the firm's capital arose from customer trading losses on January 15, 2015 involving the extraordinary move of the Swiss Franc against the Euro together with the timing of inter-affiliate transactions.

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