On Dec 10, 2014, the National Futures Association (NFA) fined FXDirectDealer LLC (FXDD) $500,000 for the following reasons:
- Failing to implement an adequate anti-money laundering program,
- Failing to file certified financial statements in a timely manner,
- Failing to adequately supervise the firm’s operations and its employees.
The original complaint against FXDD had made the following additional allegations, for which FXDD was not fined:
- Failing to offset transactions in the accounts of certain customers in a fair and acceptable method,
- Using misleading promotional material to solicit customers
Inadequate anti-money laundering program: In 2012, the NFA conducted an exam of FXDD’s operations. That exam found deficiencies in FXDD’s anti-money laundering program, for which FXDD was fined in 2013. A new exam was conducted in 2013 that showed there were still deficiencies in FXDD’s anti-money laundering program. In 2012 there were customer accounts with suspicious activity that were still in operation when NFA conducted their 2013 exam. In the 2013 complaint against FXDD, the NFA noted that FXDD did not follow its own anti-money laundering program procedures for some of its customer’s accounts. The NFA also alleged that FXDD did not follow its procedures for dealing with customers who reside in countries publicly identified by the Financial Action Task Force as high risk. Such countries include lndonesia, Kenya, Turkey, Vietnam and Yemen. The NFA also alleged that FXDD accepted a client with a criminal record without flagging that client as high risk, contrary to its own anti-money laundering program requirements. Additionally, the NFA alleged that not all FXDD employees received training for the anti-money laundering program before the required deadlines.
Failing to file certified financial statements in a timely manner: FXDD is required to submit audited financial statements to the NFA within 90 days after its fiscal year end. FXDD filed both the 2012 and 2013 audited financial statements after they were due. In 2013, they were filed on July 11, which was past the March 31 deadline.
Failing to adequately supervise employees: The NFA has fined FXDD in the past for complaints that it violated NFA compliance rules. The 2013 exam of FXDD conducted by the NFA indicated a failure to fully implement corrective actions from past findings against FXDD, with repeated deficiencies.
For full details, we encourage you to read the full NFA complaint, and NFA decision, as well as the NFA news release. You may also reference a full summary of CFTC and NFA fines for FXDD from past years.
Author: Forex Scam Alerts Google+