The clock was ticking on forex broker FXDD after the NFA issued an MRA last Friday evening that the company had until Friday, December 14th to post $3.3 million or be prohibited from continuing its US operations. The $3.3 million was part of the NFA’s case against FXDD that they were required to repay clients that were affected by asymmetrical slippage. The claim against FXDD was being challenged in court by the broker. But, as written earlier, the NFA wasn’t waiting around for the verdict of the case and requested the funds to be put in an escrow account or something similar to “demonstrate its ability to make restitution to customers.”
In response to the MRA, FXDD has announced that it has placed the $3.3 million amount in escrow, and reached an agreement with the NFA. In addition, FXDD announced that even after the issuance of the funds to escrow, the firm exceeds its net capital requirements, contradicting claims otherwise made by the NFA in its MRA. After seeing GFT disappear overnight from the US, the FXDD’s back and forth with the NFA has been affecting its US business with representatives being seen on chat rooms calming investors that they weren’t going anywhere. Therefore, the current news should give the broker some more breathing room until an official resolution has been achieved.
FXDD’s Official Comments:
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“While we work to come to a constructive resolution regarding NFA Case No. 12-BCC-021, FXDD has reached an agreement in principle with the NFA to place US$3.3m in an escrow account in accordance with the NFA requirement. The escrow account should be opened and fully-funded tomorrow.
In addition to these restricted funds in escrow, FXDD still exceeds its net capital requirements.
All trading operations in the US and abroad continue to operate as normal.”