The National Futures Association (NFA) published last Friday six separate complaints it has issued against member firms. The complaints were filed on June 30th, and became public later in the week. The complaints were against Global Futures Exchange and Trading Co, Belvedere Asset Management, Aspirant Management, Barbashop, Quick Trade Futures, IFG Markets and their owners.
Issuing of member complaints are common from the NFA. Most often, complaints are handed down to smaller firms who aren’t maintaining capital requirement minimums or for failure to correctly apply necessary supervisory procedures, such as those for anti-money laundering (AML) and know your customer (KYC). In the current batch of complaints, two were applied to firms engaged with Forex related businesses; Global Futures and IFG Markets.
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Headquartered in Tarzana, California, Global Futures is one of the US’s largest independent introducing brokers (IB), providing services for trading futures, options and Forex. According to the NFA, as of February 2013, Global Futures had over 2,000 active futures and 500 Forex accounts. In the US, Global Futures is an IB to GAIN Capital and FXCM for Forex trading.
According to the NFA, as per a review of its business in 2009 by the NFA, Global Futures, and its President, Kattayoun Hakimian, were found to be maintaining inaccurate accounting books regarding its net capital computations, as well as “failing to adopt and implement an adequate anti-money laundering program, and using deficient promotional material.” The current complaint alleges that in the NFA’s 2013 review of Global Futures, the regulator found many of the same problems that had occurred in 2009. Specifically, NFA stated that Global Futures did not correctly report financials in its monthly and annual report during 2013. The NFA added that the problem occurred even as they had notified Global Futures of the problem earlier in 2013, but that the firm continued to supply financial statements without providing corrected adjustments.
In addition to the accounting issues, the NFA complaint stated that Global Futures had failed to supervise AML procedures correctly, failing to receive proper documents from customers, as well as applying a methodology for monitoring suspicious account behavior. Among other parts of the complaint, the NFA also stated that Hakimian was directly at fault for the firm failing to meet its capital requirements, due to her issuing withdrawals. Potential penalties of the complaint against Hakimian and Global Futures include up to a $250,000 fine for each found violation, expulsion or suspension from NFA membership, or a cease and desist order.