NFA Accuses FXDD Differential Slippage and More

[AsstModerator]

NFA Accuses FXDD Differential Slippage and More​

The NFA has filed complaints against FxDirectDealer LLC and James Emerson Green, who was FXDD's Chief Compliance Officer at the time.

The case summary is...
On June 29, 2012, NFA issued a Complaint charging FXDD with using asymmetrical price slippage settings that favored FXDD over customers; failing to supervise the trade integrity of the firm's electronic trading systems; failing to maintain complete and accurate records; failing to review the use of promotional material; making improper price adjustments in customers' accounts; knowingly converting customer funds; failing to implement an adequate AML program; and failing to develop and implement adequate procedures to ensure that all entities and persons that the firm does business with are registered with the CFTC and NFA Members. The Complaint also charged FXDD and Green with willfully submitting misleading information to NFA and others; failing to treat all customers equally when giving price adjustments; and failing to supervise.

The case details file shows that the NFA accuses FXDD of gaining more than 3 million dollars from this differential slippage scheme.


What is more interesting is that FXDD is accused of unilaterally removing profits from client accounts because the customers had "manipulated" FXDD's trading system by executing trades at "off-market" prices.

FXDD did not contact the NFA about this. When the NFA became aware, they asked FXDD for evidence. Here are some selected quotes...

"Over the course of several weeks, from December 2011 to early February 2012, FXDD failed to produce any credible support to substantiate its claim that these customers had manipulated the firm's trading platform or executed orders at "off-market" prices."

"NFA repeatedly advised Green that these actions on the part of FXDD constituted violations of Compliance Rule 2-43..."

"However, NFA later learned that FXDD's supposed return of profits it had removed from the nine customer accounts was illusory and was apparently merely a ploy to mislead the NFA and buy time for FXDD to file suit seeking a temporary restraining order and preliminary injunction against the nine customers."

FPA member Raimundas is one of those dealing with FXDD's refusual to comply with the NFA.


There are other issues in the complaint. You can read them by following these links...

Click here to see the NFA Case Summary

Click here to read the NFA's complaint against FXDD. Please check paragraphs 33-50 to see more about the situation Raimundas is dealing with.


FXDD has 30 days from the filing to answer the complaint. I wonder if they will continue their legal action against those traders in the meantime or not.

 

[Michael McCarroll]

I had a terrible experience with FXDD. I would not trust them with a nickel. Do they still have the race car team?

They took 16,000 off me in just hours by manipulation of spreads and pricing. Everytime I tried to recover with a rebuy on margin calls, it would happen again. In the aftermath, none of the prices or spreads that closed me out were anywhere near real prices when I checked against other feeds. This all happened before they were licensed, and only functioning with applications. Maybe they have become honest since then....and I believe they went public at some point in the last few years. I am certain that they had a "specialist" running full time dedicated to me with my trading. Upon question of the account rep at 5:30AM EST, he admitted that they had 22 terminals running for various business purposes. Did not explain when I asked. He no longer works at the company. He since has called me from another company, with high pressure sales tactics to get investment again. When I reminded him of the incident, he hung up on me before I could hang up on him.

There is an important lesson to be learned. Find a broker, get a demo account. The minute that a salesperson calls to solicit funds, RUN FOR YOUR LIFE. Good brokers do not need to pressure you. A customer service call is nice to help you and offer suggestions. FXDD was hard sell.

 

[Aldo Colombo]

Incredible, i guess NFA action relates to FXDD US and not FXDD Europe?

 

[4XEFX]

May be time to move one. Been with them since 2007, though not huge trading account, sounds like they've ripped me off while a client. The most concerning items are the fat middle finger and deception to the regulatory body. How bold is it to lie to them about verifiable facts and to have even their attorney do so. They have an interesting accounting method that allows you to hedge, perhaps that should have been a clue to the mentality. It must be ok though if NFA didn't cite them on that.

 

[WaveRider]

It's okay FXDD. Just ask Jason from FXCM how to smoke and mirrors out of this. Tell everyone you will have an enhanced system now because the old one inexplicably only had features that happened to favor the dealer but it's enhanced now so it's okay. Is there a legitimate business model model that works? Does not stealing from people still make ends meet?

 

[Jimmy Irvin]

Before I found this out today, I had, just today, made a withdrawal request from my account at FXDD. Let's see how THAT goes, with all this cloud of noise and confusion going on.

 

[smartboy]

hi . I have had the same thing with HyMarkets . Their address is :

HY Markets
HY Markets is the trading name of Henyep Capital Markets (UK) Limited
Authorised & Regulated by Financial Services Authority
3rd Floor,28 Throgmorton Street,London EC2N 2AN
TEL44) 207-330-9021 FAX44) 207-990-9499


I have evidences that they stole my money ( more than $30,000 ) by doing the same thing .

I do not know where i can sue them . If someone please help me , I would be more thankful to him .

If someone can handle my case and I give me percentage of the compensations i get from them .

Lookinng forward to get your reply

 

[mrgummo]

Thanks, FPA for keeping us informed! One more broker off the list...

 

[PipStar]

hi . I have had the same thing with HyMarkets . Their address is :

HY Markets
HY Markets is the trading name of Henyep Capital Markets (UK) Limited
Authorised & Regulated by Financial Services Authority
3rd Floor,28 Throgmorton Street,London EC2N 2AN
TEL44) 207-330-9021 FAX44) 207-990-9499


I have evidences that they stole my money ( more than $30,000 ) by doing the same thing .

I do not know where i can sue them . If someone please help me , I would be more thankful to him .

If someone can handle my case and I give me percentage of the compensations i get from them .

Lookinng forward to get your reply

In your case you should complain to the Financial Ombudsman in the UK if you have issues with FSA regulated firms.
They have a procedure for complaints but it could take years to get an outcome!

 

[Topro]

no words....