US Court Denies Effex Petition Challenging NFA Defamation
- The documents of FXCM settlement named Effex and implied that the firm had engaged in illegal practices.
The US Court of Appeals for the Northern District of Illinois has rejected the latest attempt to clean Effex Capital’s records as it denied a petition for en banc rehearing.
Effex Capital petitioned for rehearing as it claims the NFA should not have mentioned its name in its regulatory publications about the settlement with FXCM back in 2017. The panel decision was issued yesterday and in turn, upheld the Seventh Circuit ruling in the case.
Effex alleged that NFA obtained documents from CFTC despite Effex’s request that its responses as a third party would be kept confidential. Although not explicitly named, the US regulators stated in their documents that FXCM had concealed an improper trading relationship with a “high‐frequency trader,” which was clearly referring to Effex. The documents named the trading firm and implied that Effex had engaged in illegal practices.
Effex Capital, which is managed and controlled by John Dittami, operates as an institutional OTC FX Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term provider that engages solely in transactions with highly capitalized trading counterparts.
FXCM bombshell
Back in 2017, FXCM was fined $7 million to settle CFTC charges of misleading its retail customers into believing that the firm used a ‘no dealing desk’ order Execution Execution Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Read this Term model. But in fact, FXCM used a “dealing desk” model, by routing orders through market maker Effex Capital that was actually supported and controlled by FXCM.
The brokerage and its long-serving CEO Drew Niv were forced to withdraw from the US market and have been permanently barred from the industry.
On top of this, there were other charges against Effex, which was accused of paying rebates to FXCM, allegedly in exchange for kickbacks on profitable trades, apart from abusing execution tactics to benefit both companies.
When everything seemed over, Effex and its CEO, John Dittami, brought suit against the NFA alleging that the regulator had violated its due process rights and defamed it in the documents on its website. It also said the NFA provided no opportunity for the company to defend itself before the publication of the settlement documents.
The district court dismissed the action, finding that the trading firm had not exhausted its administrative remedies. Effex then appealed.
The US Court of Appeals for the Northern District of Illinois has rejected the latest attempt to clean Effex Capital’s records as it denied a petition for en banc rehearing.
Effex Capital petitioned for rehearing as it claims the NFA should not have mentioned its name in its regulatory publications about the settlement with FXCM back in 2017. The panel decision was issued yesterday and in turn, upheld the Seventh Circuit ruling in the case.
Effex alleged that NFA obtained documents from CFTC despite Effex’s request that its responses as a third party would be kept confidential. Although not explicitly named, the US regulators stated in their documents that FXCM had concealed an improper trading relationship with a “high‐frequency trader,” which was clearly referring to Effex. The documents named the trading firm and implied that Effex had engaged in illegal practices.
Effex Capital, which is managed and controlled by John Dittami, operates as an institutional OTC FX Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term provider that engages solely in transactions with highly capitalized trading counterparts.
FXCM bombshell
Back in 2017, FXCM was fined $7 million to settle CFTC charges of misleading its retail customers into believing that the firm used a ‘no dealing desk’ order Execution Execution Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Read this Term model. But in fact, FXCM used a “dealing desk” model, by routing orders through market maker Effex Capital that was actually supported and controlled by FXCM.
The brokerage and its long-serving CEO Drew Niv were forced to withdraw from the US market and have been permanently barred from the industry.
On top of this, there were other charges against Effex, which was accused of paying rebates to FXCM, allegedly in exchange for kickbacks on profitable trades, apart from abusing execution tactics to benefit both companies.
When everything seemed over, Effex and its CEO, John Dittami, brought suit against the NFA alleging that the regulator had violated its due process rights and defamed it in the documents on its website. It also said the NFA provided no opportunity for the company to defend itself before the publication of the settlement documents.
The district court dismissed the action, finding that the trading firm had not exhausted its administrative remedies. Effex then appealed.