May 12, 2011
CFTC Settles Charges against FX Trading, LLC for Failing to Maintain Minimum Net Capital Required for Futures Commission Merchants
Federal court in New Jersey orders FX Trading to pay $110,000 civil monetary penalty.
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that a federal court entered a consent order requiring FX Trading, LLC (FX Trading), of Iselin, N.J., to pay a $110,000 civil monetary penalty for failing to satisfy the minimum financial requirements for CFTC-registered futures commission merchants (FCMs). FX Trading has been registered with the CFTC as an FCM since October 14, 2005.
The consent order stems from a CFTC enforcement action filed on December 7, 2005, alleging that, since at least October 31, 2005, FX Trading failed to comply with the minimum net capital requirements it must meet as a CFTC-registered futures commission merchant (see CFTC Press Release 5144-05, December 15, 2005). Net capital requirements are designed to ensure customer protection and the financial stability of the marketplace, among other things.
The order, entered on May 9, 2011, by Judge Jose L. Linares of the U.S. District Court for the District of New Jersey, permanently prohibits FX Trading from further violations of the Commodity Exchange Act (CEA) or CFTC regulations.
The order finds that FX Trading, as a registered FCM, was required at all times to maintain adjusted net capital equal to or in excess of $250,000 during the relevant period, October through December 2005. However, according to the order, FX Trading was undercapitalized during this period by $239,000 and failed to infuse sufficient capital to bring its adjusted net capital up to the minimum as required by the CEA and CFTC regulations.
The CFTC thanks the National Futures Association for its assistance.
The CFTC staff members responsible for this case are David Acevedo, Michael R. Berlowitz, Michael Geiser, Judith Slowly, John Adair, Lenel Hickson, Jr., Stephen J. Obie and Vincent McGonagle.
Last Updated: May 12, 2011