Paragon FX Enterprises LLC and International Commodity Advisors (ICA) were fined $100,000 each by the CFTC, while ICA principal Gregory Seitz received a penalty of $50,000 for operating unregistered commodity pools.
The initial suit stems from a December 2011 ruling by the US Commodity Futures Trading Commission (CFTC) in which Paragon FX Enterprises and ICA were unregistered Commodity Pool Operators, failing to disclosed to customers that they were not registered as a retail FX Dealer (RFED).
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Earlier this week, a New York Federal judge levied a combined fine of $250,000 against the entities. The CFTC complaint found that Paragon FX accepted orders from non-eligible contract participants in retail. A judge prohibited the destruction of the RFED’s books and records – during the process, both firm’s assets were partially frozen.
Although the two companies now face a steep fine, only ICA will receive a temporary ban from trading – the combined penalties are less than originally hoped, namely as damages were sought for restitution, disgorgement of ill-gotten gains, civil monetary penalties and permanent injunctive relief.