The National Futures Association (NFA) announced on Tuesday July 29, that it has ordered Institutional Liquidity LLC (ILQ), a Forex dealer Member of NFA located in Grand Rapids, Michigan, and three of the firm’s principals (Mark D. Krier, James D. Pieron and Jason L. Tanner) to pay a fine of $225,000. In addition, as part of the settlement offer with the NFA, ILQ has agreed to pay restitution in the amount of $123,152.32 to its customers.
The NFA also ordered ILQ to permanently withdraw its NFA membership, which seems like an overkill considering that the firm has already dropped its Retail Foreign Exchange Dealer License in April. The Decision, issued by an NFA Hearing Panel, is based on a complaint filed against ILQ, Krier, Pieron and Tanner on December 31, 2013, and on a settlement offer submitted by the firm and its three principals.
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The complaint charged ILQ, Krier and Tanner, both former employees of the NFA, with failure to cooperate promptly and fully with the NFA in an investigation. Additionally, the Complaint charged ILQ and Pieron with failing to diligently supervise their operations. ILQ, Krier, Pieron and Tanner neither admitted nor denied the allegations made against them in the complaint.
Initially, ILQ tried to stand up to the NFA and called for the dismissal of the case as all the charges are “baseless and the allegations are contrary to both fundamental legal principles and common sense.” Additionally, Mr. Krier and Mr. Tanner, both very familiar with the working methods of the association as former employees of the NFA, accused the agency of trying to make scapegoats out of them. However, they must have decided it is easier to cooperate with the NFA and pay the almost $350,000 total sum for dropping all charges rather than fight for a market they have already withdrawn from.
In April, ILQ CEO, Tanner, described the pullback from the American market as a repositioning for the company, he said to Forex Magnates: “ILQ made a strategic decision to exist in the U.S. markets, in part, to more efficiently utilize our resources in the area that we are experiencing growth. ILQ Australia was launched in early 2013 and grew quickly. Its trading volume surpassed that of its U.S. counterpart by the end of 2013. Although a difficult decision, ILQ believes that allocating its resources to better support our growth overseas will result in a favorable experience for our global partners and their clients.” The fine that the NFA slapped on the firm, as well as the time and legal costs that ILQ has had to spend on the case this year must have also played a role in this decision.