CFTC ANNOUNCES NOTICE OF INTENT TO REVOKE REGISTRATION OF FX FIRST, INC., OF NEWPORT BEACH, CALIFORNIA
Notice Alleges FX First Is Subject to Statutory Disqualification of its Registration with the CFTC
WASHINGTON, D.C. - The U.S. Commodity Futures Trading Commission (CFTC) today announced the filing of a Notice of Intent to Revoke the Registration of FX First, Inc. of Newport Beach, California, a registered futures commission merchant (FCM) in the business of trading retail, off-exchange foreign currency (forex) futures contracts.
The CFTC alleges in the Notice that FX First, which has been registered with the CFTC as an FCM since June 26, 2003, is subject to a statutory disqualification of its registration based upon the suspension of FX First's National Futures Association (NFA) membership for failure to comply with the NFA's adjusted net capital requirements and other NFA Financial Requirements.
The Notice specifically alleges that on September 11, 2003, the NFA issued a Member Responsibility Action (MRA) to FX First placing it in "liquidation only" status, effective immediately, for failure to maintain the required minimum adjusted net capital of equal to or in excess of $250,000. The Notice further alleges that, when FX First failed to bring its net capital into compliance with the NFA's requirements, on September 23, 2003, the NFA issued an amended MRA against FX First suspending its NFA membership, effective as of the close of business on September 26, 2003.
In its Notice, the CFTC alleges that suspension of FX First's NFA membership constitutes cause for the statutory disqualification of FX First under the Commodity Exchange Act.
The CFTC also has an action against FX First currently pending in the U.S. District Court for the Central District of California alleging that FX First misappropriated almost $2 million in customer funds given to the firm by customers for the purpose of speculating on the value of foreign currency futures contracts (see CFTC News Release 4868-03, November 20, 2003).
In the FX First case, the CFTC is seeking permanent injunctive relief, payment of investor losses, repayment of ill-gotten gains, and civil monetary penalties.
The following CFTC Division of Enforcement staff were responsible for this case: Elizabeth Padgett, Frank Rangoussis, Jan Folena, and Richard Glaser.
A copy of the Commission's Notice of Intent may be obtained at www.cftc.gov.
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