Exclusive: NFA Issues a Complaint against FXDD, Raising Allegations on Five Counts

According to information obtained exclusively by Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term 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.

The complaint highlights these five allegations, which inexplicably include issues related to settled charges.

In July 2012, the regulator lodged its first complaint against FXDD for alleged asymmetric slippage practices, which required the company to place $3.3 in escrow.

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) Anti-Money Laundering (AML) Anti-money laundering (AML) is a term that describes laws, processes, and regulations that are intended to prevent illegally obtained funds from being disguised as income gained through legitimate means. The fundamental purpose of the AML laws is to help safeguard, detect, and report suspicious activity including the predicate offenses to money laundering and terrorist financing, such as securities fraud and market manipulation.Most exchanges have AML measures that include identity verification Anti-money laundering (AML) is a term that describes laws, processes, and regulations that are intended to prevent illegally obtained funds from being disguised as income gained through legitimate means. The fundamental purpose of the AML laws is to help safeguard, detect, and report suspicious activity including the predicate offenses to money laundering and terrorist financing, such as securities fraud and market manipulation.Most exchanges have AML measures that include identity verification Read this Term) 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.