Global Futures & Forex Ltd (GFT) to Pay $200K Fine by CFTC to Settle Capital Violation Charges

The U.S. Commodity Futures Trading Commission (CFTC) has just issued an order which simultaneously settled charges against Global Futures & Forex, Ltd. (GFT) over a failure to comply with minimum financial requirements for Futures Commission Merchants (FCMs) and Retail Foreign Exchange Dealers (RFEDs) between the period of December 2010 and November 2012 (when it was registered as such), according to a copy of the commission's press release.

GFT was acquired by Gain Capital, following the above mentioned relevant period when the CFTC determined that GFT had violated the adjusted net capital requirement, and the order today imposes a $200,000 civil monetary penalty and a cease and desist order against GFT.

Gain Capital, which effectively owns the company, as mentioned above, since last year when Forex Magnates reported on the acquisition, was not mentioned in the order, yet a footnote in the CFTC case document explained: "4 Subsequent to the relevant period, GFF was acquired by an unaffiliated entity (the "purchaser"). The purchaser and its Affiliates Affiliates Affiliates serve as an essential component of a broker’s client acquisition tactics and marketing. One of the most important functions of affiliate marketers is the sending of leads to the broker, which are directly opening an account or visiting the broker’s website. There are several ways in which brokers are compensating affiliates based on the number and type of clients they refer to the company and whether or not or how much they end up depositing.Understanding CPA or Cost Per Acquisition T Affiliates serve as an essential component of a broker’s client acquisition tactics and marketing. One of the most important functions of affiliate marketers is the sending of leads to the broker, which are directly opening an account or visiting the broker’s website. There are several ways in which brokers are compensating affiliates based on the number and type of clients they refer to the company and whether or not or how much they end up depositing.Understanding CPA or Cost Per Acquisition T Read this Term, other than GFF, are not included in the application of the cease and desist order in this Order."

The Adjusted Net Capital (ANC) is calculated for FCMs as equal to or in excess of the greatest of $1 Million or various other haircut measures. In addition, since during the relevant period GFT was an RFED, the same rules require that RFEDs maintain $20 million plus 5% of their total retail Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term obligations in excess of $10 million at all times.

The press release described GFT’s ANC requirement as an RFED at roughly $24 million, however, during various separate months between the relevant period GFT was under capitalized by as much as $30 million at one point, based on its month-end ANC computations -according to the CFTC announcement.

The $200,000 penalty against GFT must be paid within ten days from today - the date on the CFTC order, according to the description in the filings. GFT had some of its registration statuses with the NFA withdrawn late last year around time of the acquisition - but those withdrawals were on hold by the regulator- pending a review by the CFTC. Gain Capital is listed as a principal and majority owner of GFT, according to public data on the NFA website. Shares of GCAP are trading up roughly 1% today, hovering just under $8.00 per share mark on the NYSE.