CFTC and NFA Settle Charges Against FXDirectDealer LLC

The CFTC and National Futures Association ("NFA") settled separate charges against FXDirectDealer LLC ("FXDD"), resulting in total fines of over $3.7 Million.

The CFTC issued an Order simultaneously filing and settling charges against FXDD, a CFTC-registered Retail Foreign Exchange Dealer and FCM in New York, for violating its supervision obligations by employing a trading system that gave FXDD pricing advantages over thousands of its retail customers. The CFTC Order requires FXDD to make full restitution of $1.8 Million to FXDD's current and former customers that were harmed by its violation, also imposing a $914,131 civil monetary penalty.

The NFA is separately fining FXDD for using unfair price slippage setting that favored FXDD over customers, settling charges filed in June and October of 2012. The June complaint charged FXDD with failing to maintain complete and accurate records, failing to review the use of promotional material, making improper price adjustments in customers' accounts, willfully submitting misleading information to NFA and others, and failing to treat all customers equally when giving price adjustments, among other charges. The October complaint charged FXDD with failing to implement an adequate AML program and failing to supervise the firm's AML program. Along with the previously stated requirement to make full restitution to customers and the civil monetary penalty, FXDD is required to pay over $1 Million to NFA, $914,131 of which is attributable to FXDD's unfavorable slippage practices.

See: CFTC Order; CFTC Press Release; NFA Order.See also: NFA Takes "Emergency Enforcement Action" against New York FX Dealer Member (December 10, 2012).