NFA Fines Introducing Broker for Recordkeeping and Registration Failures

A CFTC-registered introducing broker ("IB") settled charges with the National Futures Association ("NFA") for failing to comply with recordkeeping requirements and employee registration requirements.

In its Decision, NFA stated that the IB failed to comply with communication recordkeeping obligations requiring the IB to keep (i) oral pre-trade communications for a period of one year and (ii) written pre-trade communications for at least five years. In addition, NFA stated that the IB allowed employees to conduct derivatives transactions without being registered with the CFTC.

As a result, NFA found that the IB violated NFA Compliance Rules 2-9(a) ("Supervision") and 2-10(a) ("Recordkeeping") and NFA Bylaw 301(b) ("Requirements and Restrictions").

To settle the charges, the firm agreed to pay a fine of $140,000.