NFA fines Utah forex dealer member, Interbank FX LLC and its principal $225,000. See the full complaint and Interbank's response

NFA fines Utah forex dealer member, Interbank FX LLC and its principal $225,000 July 30, Chicago – National Futures Association

NFA fines Utah forex dealer member, Interbank FX LLC and its principal $225,000
July 30, Chicago – National Futures Association (NFA) has ordered Interbank FX LLC (Interbank) and its principal, Todd Crosland to jointly pay a fine of $225,000. Interbank is a Futures Commission Merchant and Forex Dealer Member of NFA, located in Salt Lake City, Utah. The Decision, issued by NFA’s Business Conduct Committee, is based on an NFA Complaint filed in July 2009 and settlement offers submitted by Interbank, Crosland and Amanda Albretsen, also a principal and former compliance director of Interbank.
The Committee found that Interbank, Crosland and Albretsen failed to implement its anti-money laundering (AML) program and failed to adequately supervise its electronic trading system. Additionally, the Committee found that Interbank, Crosland and Albretsen failed to adequately supervise the solicitation of non-Member solicitors who used deficient promotional material. The Committee also found that Crosland failed to supervise Interbank’s activities.

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Interbank and Crosland must also submit to NFA within 180 days a final independent review of its electronic trading platforms conducted by an outside party to ensure that Interbank’s electronic trading platforms are in compliance with NFA requirements. The charges against Albretsen will remain open for one-year and will be dismissed if Albretsen is not charged by NFA for failure to supervise during the one-year period.
The complete text of the Complaint and Decision can be found on NFA’s website (www.nfa.futures.org)

July 30, Chicago – National Futures Association (NFA) has ordered Interbank FX LLC (Interbank) and its principal, Todd Crosland to jointly pay a fine of $225,000. Interbank is a Futures Commission Merchant and Forex Dealer Member of NFA, located in Salt Lake City, Utah. The Decision, issued by NFA’s Business Conduct Committee, is based on an NFA Complaint filed in July 2009 and settlement offers submitted by Interbank, Crosland and Amanda Albretsen, also a principal and former compliance director of Interbank.

The Committee found that Interbank, Crosland and Albretsen failed to implement its anti-money laundering (AML) program and failed to adequately supervise its electronic trading system. Additionally, the Committee found that Interbank, Crosland and Albretsen failed to adequately supervise the solicitation of non-Member solicitors who used deficient promotional material. The Committee also found that Crosland failed to supervise Interbank’s activities.

Interbank and Crosland must also submit to NFA within 180 days a final independent review of its electronic trading platforms conducted by an outside party to ensure that Interbank’s electronic trading platforms are in compliance with NFA requirements. The charges against Albretsen will remain open for one-year and will be dismissed if Albretsen is not charged by NFA for failure to supervise during the one-year period.

The complete text of the Complaint and Decision can be found on NFA’s website (www.nfa.futures.org)

Embedded below is the final decision by the NFA (apologies for the poor quality, this is how the NFA scans the documents) and beneath it is what looks like IBFX’s official response to the opened thread on Forex Factory.

interbank fx nfa fine anti money laundering

My name is Abigail (IBFX employee) and I wanted to address your concerns. I hope our official response will help clear things up for you:

INTRODUCTION

Interbank FX is dedicated to excellence in meeting our compliance responsibilities. As a company we are continually reviewing and improving our compliance policies, procedures and safeguards for the benefit of our current and prospective customers. Moreover, in 2008 Interbank FX recruited, directly from NFA, a new Compliance Director and Compliance Manager. Interbank FX believes that we lead the industry now in our compliance with applicable regulatory duties and specifically would like to address the complaint recently issued by the NFA. The allegations contained therein pre-dated the hiring of Interbank’s new compliance team leaders and significant changes in nearly every aspect of our compliance policies.

Neither admitting nor denying any of the allegations in NFA’s complaint, Interbank FX has addressed any and all concerns contained therein and has settled the matter with the NFA. Specifically, Interbank FX would like to address the following three items contained within NFA’s complaint:

1.Non-Member Solicitor Supervision:

BACKGROUND

During the period referenced in the NFA’s complaint, Interbank FX maintained procedures to review all third party solicitor promotional material and to correct deficiencies in the materials. Among other things, NFA alleged in the complaint that Interbank FX failed to ensure that one of its non-NFA member solicitors, Global Profit Systems International (“Global”), had appropriate promotional material.

WHAT WE DID

•In November, 2007, Interbank FX terminated its relationship with Global when it failed to bring its promotional material into compliance.

•Interbank FX’s compliance policies and procedures have since been strengthened in regards to the stringency with which we review solicitors’ promotional material and post-review enforcement of our recommendations.

•Interbank FX adopted a policy in December 2007, to refuse to do business with U.S. solicitors unless they are members of the NFA.

GOING FORWARD

Interbank FX does business with only those U.S. solicitors who are members of the NFA and strives to efficiently enforce strict promotional material compliance standards for all U.S. and foreign solicitors.

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2.Anti-Money Laundering Program

BACKGROUND

Among other things, NFA alleged in the complaint that Interbank FX failed to file Suspicious Activity Reports (“SAR”) in response to “red flags” from a non-NFA member, Solicitor A.

WHAT WE DID

•Interbank FX terminated Solicitor A in December 2007, when it became aware that Solicitor A had misled the company with regard to websites he operated.

•Interbank FX filed a SAR-SF report with FinCEN when it became apparent to Interbank FX that such a report was necessary.

•Interbank FX currently refuses to do business with U.S. solicitors unless they are members of the NFA.

GOING FORWARD

Interbank FX, neither admitting nor denying any of the allegations in the complaint, has since developed a more robust and rigorous AML program and strives to be a leader in AML compliance.

3.Interbank FX Trading System

BACKGROUND

NFA’s complaint alleged that Interbank FX experienced multiple instances during which customers may have been prevented or limited from accessing the trading system. Additionally, NFA alleged that Interbank FX failed to properly notify customers of these instances.

WHAT WE DID

•During the period in question, Interbank FX had limited methods of communicating system interruptions to customers. However, since then, Interbank FX has developed and employed a new system of notification by which customers are notified promptly and effectively of all system interruptions which could potentially affect their trading.

•Almost all of the “incidences” referred to in the NFA’s complaint were incidences involving required daily maintenance. Since September 11, 2008, this daily maintenance is now consolidated into a fully disclosed customer maintenance window consistent with financial industry standards. Even considering these daily maintenances, system-up time during the period referenced in the complaint exceeded 99.9%.

•Additionally, in 2009, Interbank FX has continued to demonstrate its trading system efficiency and has experienced 99.99% server up-time (outside of the maintenance window).

GOING FORWARD

Interbank FX, neither admitting nor denying any of the allegations in the complaint, has addressed and enhanced its procedures to ensure optimal performance in managing our electronic trading systems.

CONCLUSION

Interbank FX is committed to being a leader in our industry for excellence in compliance matters. As we move forward from the unfortunate events which led to the NFA’s complaint, we thank the NFA for helping to promote a healthy trading environment for our customers and the industry as a whole. We look forward to continuing our growth as your FOREX Dealer Member consistent with our obligations to you under NFA rules and the even more rigorous standards we have set for ourselves.

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