According to information obtained exclusively by Forex Magnates, the National Futures Association (NFA) has served a complaint to FXDirectDealer LLC (FXDD) and Joseph Botkier, CEO of the company, as he was serving as principal of FXDD, during the times relevant to the complaint.
Staying true to the commitment to destroy the US retail foreign exchange market, the NFA is not skipping this last opportunity to slap a hefty fine on FXDD. According to the letter of complaint, the company is facing up to $1,250,000 in fines from the NFA, as according to the letter the maximum monetary fine for every allegation may not exceed $250,000.
The letter lists five counts of NFA Requirements being violated while FXDD operated as a Futures Commission Merchant (FCM) and was registered as a Forex Dealer Member (FDM) of the NFA, after an examination was launched by the regulator in August 2013.
ln October 2012, the BCC issued a second complaint against FXDD, charging the firm with failing to adequately investigate suspicious activity in several customers’ accounts, and failing to conduct annual AML training. A settlement on both counts followed in September 2013 with FXDD paying more than $1.8 million in restitution to FXDD customers, and a fine to the NFA of over $1 million.
The NFA began its examination in August 2013. The first two counts in the regulator’s new letter alleged that FXDD failed to implement an adequate Anti-Money Laundering (AML) program, and failed to offset transactions on certain customers accounts in a fair and acceptable method.
The next three counts constitute failing to file certified financial statements in a timely manner, using misleading promotional material to solicit customers and failing to adequately supervise the firm’s operations and employees.
With ILQ recently receiving a fine just after acquisition and before fully exiting the US market, there seems to be a pattern in the NFA’s decision-making process – milk them for all they’re worth. The company’s book was sold to FXCM, as reported by Forex Magnates in May.
According to the letter, FXDD must file a written answer to the complaint within thirty days after being received. The firm is required to respond to each allegation in the complaint by admitting, denying or affirming that it lacks sufficient knowledge or information to admit to or deny the allegation.
The company faces potential penalties, disqualification and ineligibility. The NFA may impose one or more of the following penalties: expulsion or suspension for a specified period from NFA membership, barring or suspension for a specified period from association with an NFA Member, censure or reprimand.
In terms of monetary penalties, a monetary fine will not exceed $250,000 for each violation found, with the possibility for an order to cease and desist, or any other fitting penalty or remedial action not consistent with the above mentioned penalties.
No official statement was made by the company at the time of publication.