The American National Futures Association (NFA) revealed today that on December 24th, it ordered Back Bay FX (BBFX) and its CEO Paul Towne, a contributor on Forex Magnates Experts, to pay a $25,000 fine and to enhance the introducing broker’s AML program. The decision was pursuant to a settlement offer submitted by the firm.
This decision taken by the American financial watchdog should serve as a warning sign to anyone in the online trading industry considering operating in the US. The case involved introducing non-US residents to brokers who were outside the US and the NFA decided that it was in its jurisdiction and interest to penalize the firm and its CEO. This level of regulators’ zeal to criminalize normal business activity has already driven out most of the retail brokers who once operated in America, making the market uncompetitive.
Just two months ago, on October 28,2014, the NFA issued a complaint against BBFX, an introducing broker, commodity trading advisor, forex firm, and swap firm member of the association. The complaint alleged that BBFX failed to implement an adequate customer identification program for customers introduced to foreign brokers, monitor accounts for suspicious activity, and conduct anti-money laundering (AML) training. The NFA also alleged that BBFX and Towne failed to supervise, in violation of NFA compliance rules.
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BBFX and Towne submitted an offer to the NFA in which, without admitting or denying the allegations of the complaint, they agreed to pay a fine of $25,000 to NFA, and also agreed to enhance the firm’s AML program.
According to the NFA, its decision terminates all complaints, investigations and audits relating to BBFX and Towne which were pending as of the date of their offer. ln addition, this decision shall not be used as a sole basis for any other action or proceeding by NFA against them, including any registration matter, except their offer.
This decision however, may be used in an action to enforce their terms or in a subsequent disciplinary action or regulatory action brought against them, in which case their offer and this decision may be considered as disciplinary history and evidence in aggravation.
The sanctions render Towne ineligible to serve on a disciplinary committee, arbitration panel, oversight panel or governing board of any self-regulatory organization until three years after the date of this decision, or until he has satisfied all the sanctions and conditions imposed by it.