CFTC ORDERS REGISTERED FUTURES COMMISSION MERCHANT TO PAY $200,000 PENALTY

FROM:  U.S. COMMODITY FUTURES TRADING COMMISSION 

Global Futures & Forex, Ltd. Ordered to Pay $200,000 Penalty to Settle CFTC Charges of Violating Minimum Financial Requirement Rules

Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today issued an Order filing and simultaneously settling charges that, between December 2010 and November 2012 (the Relevant Period), Global Futures & Forex, Ltd. (GFF), a CFTC-registered Futures Commission Merchant (FCM) and former Retail Foreign Exchange Dealer (RFED) headquartered in Grand Rapids, Michigan, failed to comply with minimum financial requirements for FCMs and RFEDs. The CFTC Order imposes a $200,000 civil monetary penalty and a cease and desist order against GFF for its violations.

Under CFTC Regulations in effect during the Relevant Period, an FCM was required to maintain adjusted net capital (ANC) equal to, or in excess of, the greatest of $1 million or various other measures, including the “amount of [ANC] required by a registered futures association of which it is a member.” The same Regulations also required that an RFED maintains ANC of $20 million plus five percent of its total retail forex obligation in excess of $10 million at all times. GFF’s ANC requirement as an RFED was approximately $24 million.

According to the Order, GFF did not maintain its required ANC during various separate months between December 2010 and November 2012, with month-end ANC computations showing that GFF was undercapitalized by as much as $30 million at one point.

GFF has been registered with the CFTC as an FCM since November 2000 and as an RFED from December 2010 to August 2013.

CFTC Division of Enforcement staff members responsible for this case are Andrew Ridenour, Daniel Jordan, and Richard Wagner. Lisa Marlow of the CFTC’s Division of Swap Dealer and Intermediary Oversight also assisted in this matter.

COMPANY WILL PAY $275,000 TO SETTLE CHARGES OF VIOLATING MINIMUM FINANCIAL REQUIREMENT RULES

FROM:  U.S. COMMODITY FUTURES TRADING COMMISSION 
FXDirectDealer, LLC Ordered to Pay $275,000 Penalty to Settle CFTC Charges of Violating Minimum Financial Requirement Rules

Washington, DC - The U.S. Commodity Futures Trading Commission (CFTC) today issued an Order filing and simultaneously settling charges that, between November 2010 and December 2012, FXDirectDealer, LLC (FXDD), a CFTC-registered Retail Foreign Exchange Dealer (RFED) and Futures Commission Merchant (FCM) headquartered in New York, New York, failed to comply with minimum financial requirements for RFEDs and FCMs. FXDD has been registered with the CFTC as an FCM since December 10, 2009 and as an RFED since September 2, 2010.

Effective October 18, 2010, the CFTC adopted comprehensive rules to protect members of the public who buy foreign currency (forex) contracts from, or sell forex contracts to, forex firms. Under these rules, RFEDs and FCMs that offer or engage in retail forex transactions must at all times maintain adjusted net capital of $20 million, or more in certain circumstances.

According to the CFTC Order, FXDD did not maintain its required adjusted net capital during at least 18 separate months between November 2010 and December 2012, with month-end adjusted net capital computations showing that FXDD was undercapitalized by more than $7.5 million at one point. Because FXDD reported its adjusted net capital on a consolidated basis with its subsidiary, FXDD apparently did not realize that, on the required stand-alone basis, it failed to satisfy its adjusted net capital requirements throughout most of this period, the Order finds.

The Order imposes a $275,000 civil monetary penalty and a cease and desist order against FXDD for its violations. The Order notes that in settling this matter, the CFTC took into account FXDD’s cooperation and the corrective action it undertook after its deficiencies were discovered.

The CFTC thanks the National Futures Association for its assistance.

CFTC Division of Enforcement staff members responsible for this case are Rachel Hayes, Thomas Simek, Charles Marvine, Rick Glaser, and Richard Wagner. Kevin Piccoli, Ronald Carletta, Robert Loeber, and Nicholas Chiacchere of the CFTC’s Division of Swap Dealer and Intermediary Oversight also assisted in this matter.