A leading US futures brokerage has received a penalty by the CFTC after failing to maintain systems and controls that could have prevented the firm in making a loss of $127 million during the global recession.
US based Futures Commission Merchant (FCM), FCStone LLC, has been ordered to pay a civil monetary penalty of $1.5 million for failing to diligently supervise its officers and employees relating to its business as an FCM by the country’s financial regulatory authority. The firm is believed to have violated the Commission Regulation 166.3, 17 C.F.R. § 166.3 (2008).
FC Stone whose history spans over 90 years has been an active and serious player in futures trading market, during the volatile period of 2008, post global recession, the firm had failed to implement adequate customer credit and concentration risk policies and controls, which consequently allowed one account (client account) to acquire a significant options position that it could not afford to maintain. As a result the brokerage firm was forced to take over the account, and lost approximately $127 million.
The CFTC Order requires FCStone to pay a civil monetary penalty of $1.5 million, retain an independent consultant to review its internal controls and procedures, and cease and desist from violating its supervisory obligations.
David Meister, the CFTC’s Director of Enforcement said in an official statement: “The Commission’s supervision regulation helps ensure the financial integrity of the markets and safeguard customer funds. When an FCM’s financial risk controls are so lacking that they do virtually nothing to prevent an unchecked customer from taking grossly excessive trading risks as happened here, a harmful domino effect of financially dangerous consequences can follow, affecting not only the FCM but also potentially other customers and the market at large. This case should serve to remind FCMs to make sure that their risk controls are in order.”
Futures brokers have been facing criticism after major players such as MF Global and PFG Best were 'caught out' and filed for bankruptcy, which resulted in clients losses of $1.6 billion and $200 million respectively.
Details revealed by the regulator highlight how the FCM was weak in ensuring it had adequate systems and controls when dealing with high risk derivatives contracts. During the period of January 1, 2008 through to March 1, 2009, FCStone failed to diligently supervise its officers’ and employees’ activities relating to risks associated with its customers’ accounts, and with the client account, which was primarily controlled by two individuals who traded natural gas futures, swaps, and option contracts. Because FCStone did not have adequate credit and concentration risk policies and controls, the two account owners accumulated a massive position -- more than 2.5 million relatively illiquid commodity option contracts, which the account owners could not afford to maintain. After the value of the positions deteriorated over the course of 2008, the account owners were unable to meet their financial obligations with respect to the account. As FCMs are required to do in that situation, FCStone assumed the financial obligations to the Clearing House that carried the positions. Unable to successfully manage the positions.
The US based FCM has witnessed natural organic growth and through a combination of high profile mergers and acquisitions, primarily between International Assets Holding Corporation (INTL) and FCStone Group in 2009 the firm has become an international, Fortune 500 financial services organisation called INTL FCStone Inc.
US based Futures Commission Merchant (FCM), FCStone LLC, has been ordered to pay a civil monetary penalty of $1.5 million for failing to diligently supervise its officers and employees relating to its business as an FCM by the country’s financial regulatory authority. The firm is believed to have violated the Commission Regulation 166.3, 17 C.F.R. § 166.3 (2008).
FC Stone whose history spans over 90 years has been an active and serious player in futures trading market, during the volatile period of 2008, post global recession, the firm had failed to implement adequate customer credit and concentration risk policies and controls, which consequently allowed one account (client account) to acquire a significant options position that it could not afford to maintain. As a result the brokerage firm was forced to take over the account, and lost approximately $127 million.
The CFTC Order requires FCStone to pay a civil monetary penalty of $1.5 million, retain an independent consultant to review its internal controls and procedures, and cease and desist from violating its supervisory obligations.
David Meister, the CFTC’s Director of Enforcement said in an official statement: “The Commission’s supervision regulation helps ensure the financial integrity of the markets and safeguard customer funds. When an FCM’s financial risk controls are so lacking that they do virtually nothing to prevent an unchecked customer from taking grossly excessive trading risks as happened here, a harmful domino effect of financially dangerous consequences can follow, affecting not only the FCM but also potentially other customers and the market at large. This case should serve to remind FCMs to make sure that their risk controls are in order.”
Futures brokers have been facing criticism after major players such as MF Global and PFG Best were 'caught out' and filed for bankruptcy, which resulted in clients losses of $1.6 billion and $200 million respectively.
Details revealed by the regulator highlight how the FCM was weak in ensuring it had adequate systems and controls when dealing with high risk derivatives contracts. During the period of January 1, 2008 through to March 1, 2009, FCStone failed to diligently supervise its officers’ and employees’ activities relating to risks associated with its customers’ accounts, and with the client account, which was primarily controlled by two individuals who traded natural gas futures, swaps, and option contracts. Because FCStone did not have adequate credit and concentration risk policies and controls, the two account owners accumulated a massive position -- more than 2.5 million relatively illiquid commodity option contracts, which the account owners could not afford to maintain. After the value of the positions deteriorated over the course of 2008, the account owners were unable to meet their financial obligations with respect to the account. As FCMs are required to do in that situation, FCStone assumed the financial obligations to the Clearing House that carried the positions. Unable to successfully manage the positions.
The US based FCM has witnessed natural organic growth and through a combination of high profile mergers and acquisitions, primarily between International Assets Holding Corporation (INTL) and FCStone Group in 2009 the firm has become an international, Fortune 500 financial services organisation called INTL FCStone Inc.
Retail Trading & Prop Firms in 2025: Five Defining Trends - And One Prediction for 2026
Executive Interview | Charlotte Bullock | Chief Product Officer, Bank of London | FMLS:25
Executive Interview | Charlotte Bullock | Chief Product Officer, Bank of London | FMLS:25
In this interview, we sat down with Charlotte Bullock, Head of Product at The Bank of London, previously at SAP and now shaping product at one of the sector’s most ambitious new banking players.
Charlotte reflects on the Summit so far and talks about the culture inside fintech banks today. We look at the pressures that come with scaling, and how firms can hold onto the nimble approach that made them stand out early on.
We also cover the state of payments ahead of her appearance on the payments roundtable: the blockages financial firms face, the areas that still need fixing, and what a realistic solution looks like in 2026.
In this interview, we sat down with Charlotte Bullock, Head of Product at The Bank of London, previously at SAP and now shaping product at one of the sector’s most ambitious new banking players.
Charlotte reflects on the Summit so far and talks about the culture inside fintech banks today. We look at the pressures that come with scaling, and how firms can hold onto the nimble approach that made them stand out early on.
We also cover the state of payments ahead of her appearance on the payments roundtable: the blockages financial firms face, the areas that still need fixing, and what a realistic solution looks like in 2026.
In this conversation, we sit down with Drew Niv, CSO at ATFX Connect and one of the most influential figures in modern FX.
We speak about market structure, the institutional view on liquidity, and the sharp rise of prop trading, a sector Drew has been commenting on in recent months. Drew explains why he once dismissed prop trading, why his view changed, and what he now thinks the model means for brokers, clients and risk managers.
We explore subscription-fee dependency, the high reneging rate, and the long-term challenge: how brokers can build a more stable and honest version of the model. Drew also talks about the traffic advantage standalone prop firms have built and why brokers may still win in the long run if they take the right approach.
In this conversation, we sit down with Drew Niv, CSO at ATFX Connect and one of the most influential figures in modern FX.
We speak about market structure, the institutional view on liquidity, and the sharp rise of prop trading, a sector Drew has been commenting on in recent months. Drew explains why he once dismissed prop trading, why his view changed, and what he now thinks the model means for brokers, clients and risk managers.
We explore subscription-fee dependency, the high reneging rate, and the long-term challenge: how brokers can build a more stable and honest version of the model. Drew also talks about the traffic advantage standalone prop firms have built and why brokers may still win in the long run if they take the right approach.
Executive Interview | Remonda Z. Kirketerp Møller| CEO & Founder Muinmos | FMLS:25
Executive Interview | Remonda Z. Kirketerp Møller| CEO & Founder Muinmos | FMLS:25
In this interview, Remonda Z. Kirketerp Møller, founder of Muinmos, breaks down the state of AI in regtech and what responsible adoption really looks like for brokers. We talk about rising fragmentation, the pressures around compliance accuracy, and why most firms are still in the early stages of AI maturity.
Ramanda also shares insights on regulator sandboxes, shifting expectations around accountability, and the current reality of MiCA licensing and passporting in Europe.
A concise look at where compliance, onboarding, and AI-driven processes are heading next.
In this interview, Remonda Z. Kirketerp Møller, founder of Muinmos, breaks down the state of AI in regtech and what responsible adoption really looks like for brokers. We talk about rising fragmentation, the pressures around compliance accuracy, and why most firms are still in the early stages of AI maturity.
Ramanda also shares insights on regulator sandboxes, shifting expectations around accountability, and the current reality of MiCA licensing and passporting in Europe.
A concise look at where compliance, onboarding, and AI-driven processes are heading next.
In this conversation, we speak with Aydin Bonabi, CEO and co-founder of Surveill, a firm focused on fraud detection and AI-driven compliance tools for financial institutions.
We start with Aydin’s view of the Summit and the challenges brokers face as fraud tactics grow more complex. He explains how firms can stay ahead through real-time signals, data patterns, and early-stage detection.
We also talk about AI training and why compliance teams often struggle to keep models accurate, fair, and aligned with regulatory expectations. Aydin breaks down what “good” AI training looks like inside a financial environment, including the importance of clean data, domain expertise, and human oversight.
He closes with a clear message: fraud is scaling, and so must the tools that stop it.
In this conversation, we speak with Aydin Bonabi, CEO and co-founder of Surveill, a firm focused on fraud detection and AI-driven compliance tools for financial institutions.
We start with Aydin’s view of the Summit and the challenges brokers face as fraud tactics grow more complex. He explains how firms can stay ahead through real-time signals, data patterns, and early-stage detection.
We also talk about AI training and why compliance teams often struggle to keep models accurate, fair, and aligned with regulatory expectations. Aydin breaks down what “good” AI training looks like inside a financial environment, including the importance of clean data, domain expertise, and human oversight.
He closes with a clear message: fraud is scaling, and so must the tools that stop it.
Exness expands its presence in Africa: Inside our interview with Paul Margarites in Cape Town
Exness expands its presence in Africa: Inside our interview with Paul Margarites in Cape Town
Finance Magnates met with Paul Margarites, Exness regional commercial director for Sub-Saharan Africa, during a visit to the firm’s office opening in Cape Town. In this talk, led by Andrea Badiola Mateos, Co-CEO at Finance Magnates, Paul shares views on the South African trading space, local user behavior, mobile trends, regulation, team growth, and how Exness plans to grow in more markets across the region. @Exness
Read the article at: https://www.financemagnates.com/thought-leadership/exness-expands-its-presence-in-africa-inside-our-interview-with-paul-margarites/
#exness #financemagnates #exnesstrading #CFDtrading #tradeonline #africanews #capetown
Finance Magnates met with Paul Margarites, Exness regional commercial director for Sub-Saharan Africa, during a visit to the firm’s office opening in Cape Town. In this talk, led by Andrea Badiola Mateos, Co-CEO at Finance Magnates, Paul shares views on the South African trading space, local user behavior, mobile trends, regulation, team growth, and how Exness plans to grow in more markets across the region. @Exness
Read the article at: https://www.financemagnates.com/thought-leadership/exness-expands-its-presence-in-africa-inside-our-interview-with-paul-margarites/
#exness #financemagnates #exnesstrading #CFDtrading #tradeonline #africanews #capetown
