NFA Reaches Settlement with ZuluTrade, Fines Giohais $30,000

ZuluTrade and its CEO receive a slap on the wrist from US watchdog.

Popular copy trading platform ZuluTrade has reached a settlement deal with the American regulatory body supervising forex dealers and introducing brokers, the US National Futures Association (NFA).

The NFA’s Business Conduct Committee has announced that it has accepted an offer from ZuluTrade and its CEO Leon Yohai Giochais and fined them $30,000, payable upon any future application for NFA membership.

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Background

ZuluTrade was accused of possibly violating some of its requirements as a registered IB according to an NFA document filed April 28, 2016.

The first count of the complaint was regarding failure to comply with minimum capital requirements. The background to this is that back in 2014 ZuluTrade was fined $350,000 for opening accounts for individuals from US sanctioned countries.

The second count of the complaint is regarding failure to implement an AML (anti money laundering) program. The issue here was that Zulu relied on the forex brokers it was acting as IB for to handle its customer identification requirements. The problem is that two of these brokers were not regulated in the US and therefore did not fall under the jurisdiction of the NFA which considers it unacceptable.

The third count of the complaint is regarding failure to adequately supervise the firm’s employees, agents and operations. Here the main issue was this: “As evidenced by the capital and AML deficiencies alleged in Counts I and ll, above, Zulu and Giochais failed to adequately supervise Zulu’s operations to ensure that Zulu was in capital compliance, and that the firm adequately reviewed customers’ accounts for compliance with CIP and NFA Bylaw 1101, and for suspicious activity.”

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