According to an announcement by the U.S. Commodity Futures Trading Commission (CFTC), the company behind the US entity of FXDD, FXDirectDealer LLC, has settled to pay another $600,000 civil monetary penalty.
Forex Magnates reported earlier this month about a National Futures Association (NFA) complaint which was served to the company and its CEO Joseph Botkier.
Staying truthful to its commitment to destroy the US retail foreign exchange market, the NFA listed 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 US regulators stated last year, that the company has been undercapitalized by more than $7.5 million at one point in time.
In September last year, the CFTC already settled the undercapitalization matter with FXDD for $275,000, as the firm did not maintain the required adjusted net capital for a period of 18 separate months between November 2010 and December 2012.
The new settlement comes in relation to the same undercapitalization matter, failure to supervise employees of the company and failing to comply with the previous CFTC order issued in September 2013.
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According to the CFTC order, between March and November 2013, FXDD improperly included certain funds held in an account at an unregulated entity in its adjusted net capital (ANC) calculations.
Further on, according to the CFTC order, the firm was undercapitalized for 96 days between April 24, 2013 and December 13, 2013, and for 41 days between September 30, 2013 and December 13, 2013, hence violating the prior order from September 30th of last year.
The Order also finds that FXDD violated CFTC minimum financial requirements by making three prohibited equity withdrawals between January 13, 2014 and February 14, 2014.
According to the CFTC, the company has been using “an inadequate supervisory system and its failure to diligently supervise employees, officers, and agents with respect to the handling and monitoring of FXDD’s compliance with its minimum financial requirements.”
The CFTC’s order imposes a $600,000 civil monetary penalty against FXDD, as well as a cease and desist order and a three-year registration ban as an FCM or RFED. The company has already filed a request pending to withdraw its registrations.
The CFTC alleged at the time that the company had been undercapitalized by more than $7.5 million at one point in time. The company’s book was sold to FXCM, as reported by Forex Magnates in May.
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