NFA hits FXDD with another complaint though administrative in nature. Previously FXDD was charged for applying asymmetric slippage however current complaint deals with internal policies and focuses on FXDD’s AML policy: the NFA charges FXDD for failure to notice what it deems as suspicious activity in several customers’ accounts, the full Complaint is found below:
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14 Comments on this post
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Andy said:
October 24th, 2012 at 12:59 am
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Michael Greenberg said:
well fxdd stood up to them with previous complaint so it’s no wonder nfa were digging to find something new
October 24th, 2012 at 8:28 am -
Adil Siddiqui said:
Some balance in the claim however with point 16, i have dealt with several clients over the years, retail and institutional, is very rare to see people who actually complete the net worth, salary etc correctly, people might also have trading accounts in other brokers, and several other factors that affect the overall weatlh
October 24th, 2012 at 8:39 am -
Michael Greenberg said:
of course, people usually fill this absentmindedly
October 24th, 2012 at 10:07 am -
Andy said:
I dont know what the regulation is in regard to that exactly, but i know that for example Oanda has suspended accounts in the past, when you send them too much money relative to net-worth. Then the client needs to restate the net-worth to what ever number is required that Oanda’s ass is covered. Or withdraw funds.
October 24th, 2012 at 1:31 pm -
john said:
one more time the NFA that dropped the ball on PFG and other big names goes after forex brokers in the US trying to drive the business outside the country. No wonder clients don’t want to deal with the NFA anymore and prefer to deal with European regulators who seems to have more common sense!!
October 24th, 2012 at 3:17 pm -
Ron Finberg said:
One important thing to keep in mind is that we live in the post 9/11 world of finance with much greater scrutiny of money laundering. While one can question the overall effects of the war on terrorism over the last 11 years, one area that has been a success is the “follow the money” approach of tracking suspicious monetary behavior.
Therefore, if you aren’t keeping track of these deposit/withdrawal issues (which most brokers have automated to send them warning messages of strange activity) you are putting yourself in risk to get busted by a regulator.
October 24th, 2012 at 3:49 pm -
Michael Greenberg said:
NFA stands for national FUTURES association, do the math..
October 24th, 2012 at 3:56 pm -
Jeff said:
Well said Michael. It’s like Coke regulating Pepsi.
October 24th, 2012 at 5:15 pm -
The Truth said:
@Ron,
Your comment would make sense assuming the purpose of the complaint was to correct FXDD deficiencies. In my opinion NFA crafted this new action to leverage the existing one so they could have “another reason” to shut down FXDD, or at least save FXDD but kick out Mr Green. It’s another show of power (and arrogance) from NFA, where the message is, you challenge us, you pay the consequences.AML violations is the new trend in NFA fines, as there is a lot of arbitrary interpretation and general guidelines including when if to file a SAR, so it’s a perfect fit them. AML rules are for the financial industry, not for the messy $500-micro-Forex-Expert-advisors world we’re in. I am sure 99% of NFA firms could get fined for the same reason. So the message to the rookie auditors is simple… go dig for something, worst case scenario use AML.
Good luck FXDD, and good luck to all you nfa registered firms. You need a lot of it dealing with these people.
October 25th, 2012 at 2:13 pm -
Michael Greenberg said:
indeed Green is not longer the CCO..
October 25th, 2012 at 2:37 pm -
Ron Finberg said:
@the truth: Not so sure that 99% of firms would get fined for the same reason. I am not here to defend the NFA, but any broker who can’t submit a plan on how to enforce its internal supervision is vulnerable to bigger problems if they are caught. This isn’t a complicated thing, it includes policies such as a three strike policy for firing employees that fail to follow compliance procedures and end of the month reviews.
In a similar fashion, every company has a sexual harassment policy sign hanging on one of their walls, but if a claim actually occurs and a firm can’t show how their policies were being enforced, they will run into problems.
Also, AML is 100% part of this industry. I don’t think there is a broker that doesn’t get asked once a week if they can deposit from one account and withdraw to another. 99% of deposits are legitimate, nut you always have people trying to do some sort of procedure, whether it is tax evasion or money laundering is a different question. New brokers are especially at risk as violators will try to take advantage of their lack of knowledge in the matter and eagerness for deposits.
October 25th, 2012 at 3:42 pm -
A. said:
Funny how many here are compassionate toward a Malta-located broker which, despite being regulated by the NFA (among others), prefers to write in bold on its “About Us” page that it’s regulated by the Maltese financial authorities…
October 25th, 2012 at 7:12 pm -
The Truth said:
@Ron, Good point, but let’s stick to the topic.
Never questioned AML policies, but the way the “regulator” applies them. Read carefully the latest cases were AML was involved and see for yourself.BTW, in the “normal” world, my boss is accused of sexual harassment, he goes to a judge in front of a jury. Now imagine if it was the judge itself making such accusation.
October 26th, 2012 at 3:28 am
Again? It almost looks like NFA got a thing for this firm..