Aggregated News From Investment Management Regulators

CFTC Fines Houston, Chicago, and London-Based Introducing Brokers for Net Capital Deficiencies

Report/Flag

Please complete the required fields.



— The Commodity Futures Trading Commission today issued orders filing and settling charges against three registered introducing brokers (IB)—EOX Holdings LLC of Houston, Texas; Futures International LLC of Chicago, Illinois; and OTC Europe LLP of London, United Kingdom—for failure to meet minimum adjusted net capital requirements.

The orders require EOX, Futures International, and OTC Europe to each pay a civil monetary penalty in the amount of $120,000 and to cease and desist from further violations of the Commodity Exchange Act (CEA) and CFTC regulations, as charged. The orders recognize each IB’s remediation and cooperation to ensure that they meet their obligations as registrants.

“We will continue working cooperatively with the Division of Swap Dealer and Intermediary Oversight to bring enforcement actions when registered firms fail to meet minimum capital requirements,” said Division of Enforcement Director James McDonald.

“Ensuring the financial integrity of derivatives market intermediaries is a key aspect of the CFTC’s mission, making necessary the reporting of guaranteed obligations and liabilities of subsidiaries or affiliates in the computation of adjusted net capital,” added Division of Swap Dealer and Intermediary Oversight Director Joshua B. Sterling.

Case Background

The orders find that EOX, Futures International, and OTC Europe improperly accounted for deductions arising out of their agreement to guarantee a revolving line of credit for an affiliated company in computing their adjusted net capital. The orders reflect that during the period in which the three IBs were guarantors of drawdowns on the revolving line of credit, funds were drawn on the line of credit on a monthly basis for the benefit of the affiliated company, in amounts ranging from $10 million to $26 million . None of the three IBs deducted the amount of the guaranteed drawdown in its calculation of adjusted net capital as required. The orders find that, had they done so, the net capital of each IB would have fallen below the adjusted net capital required by the CEA and CFTC regulations, with resulting deficits ranging from approximately $9 million to $25 million.

The CFTC thanks the National Futures Association for its assistance with this matter.

The Division of Enforcement staff members responsible for these cases are Jon J. Kramer, David A. Terrell, Scott R. Williamson, and Robert T. Howell.

Source link

Regulator Information

Abbreviation: CFTC
Jurisdiction: USA

Recent Articles

CVM warns of irregular performance by KOI Global LLC, Ventura Group and Orotrader as securities brokers

This post was translated by Regulatory.News for informational purposes only; the content below is not an official translation from the regulator. See the content...

Willers Consulting Group

We believe this firm may be providing financial services or products in the UK without our authorisation. Find out why you should be wary...

Stanley Associates LLC

We believe this firm may be providing financial services or products in the UK without our authorisation. Find out why you should be wary...

Adjudication order in respect of GKS Reality Private Limited in the matter of Illiquid Stock Options at BSE

This news item was originally published by the Securities and Exchange Board of India (SEBI IN). See the article here: Read more

Adjudication Order in respect of Nikhil Jalan and Sons HUF in the matter of Illiquid Stock Options at BSE

This news item was originally published by the Securities and Exchange Board of India (SEBI IN). See the article here: Read more

Get the latest from Regulatory.News in your inbox!

×