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CFTC Hits FXCM with Another Fine

FXCM has agreed a settlement for $650,000 with the US Commodity Futures Trading Commission (CFTC), relating to allegations that the firm was under-capitalised following the volatility caused by the Swiss National Bank’s (SNB) decision to abandon its peg to the euro.

The CFTC originally filed the civil action against FXCM’s US subsidiary in the Southern District Court of New York on August 18, 2016.

The action alleges that FXCM US was briefly under-capitalised as a result of the SNB’s unexpected announcement on January 15, 2015, that it was abandoning its historical policy of pegging the Swiss franc to a fixed exchange rate of 1.2000 Swiss francs per euro.  

The action also concerns the negative-balance protection policy of FXCM US prior to January 15, 2015, a policy FXCM US no longer provides to US customers.  

FXCM claims that this settlement, which includes a fine of $650,000, brings to a close all material US regulatory matters affecting FXCM US.

FXCM has made headlines in the US recently as the CFTC fined the firm and its founding partners $7 million and ordered it to withdraw from doing business in the US for defrauding retail FX customers.

Profit & Loss managing editor, Colin Lambert, gives his opinion on what we know so far in this other legal case in his regular “And Another Thing…..” column.

Galen Stops

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