FXCM Fights Back Against CFTC Charges, Says Firm a 'victim of the SNB Event'


(Image Credit: Bowe King/The Mill Chicago)


The US Commodity Futures Trading Commission hit New York-based Forex broker Forex Capital Markets (FXCM) with a lawsuit yesterday, but FXCM issued a very strongly-worded statement today that disputes the allegations and rejects outright some of the claims the regulatory agency has made.

Jaclyn Sales, Corporate Communications and Investor Relations for FXCM, states that the CFTC is mistaken when it claimed that FXCM did not inform regulators of the capital shortfall in a timely manner.

According to FXCM, the CFTC and the NFA were immediately notified of the massive capital shortfall that resulted from the SNB decision on January 15, 2015:
“Equally unwarranted is the CFTC's claim that the Company did not timely notify the CFTC of its net capital shortfall. As noted above, the regulators were fully apprised of the capital shortfall and, within hours of the SNB Event, the CFTC and the NFA were on site at FXCM's offices.”
Yesterday, the CFTC also charged that FXCM misled clients by leading them to believe that they were protected from incurring negative balances, but FXCM says that is not the case and that the company went out of its way to make sure traders were fully informed of the risks:
“To the contrary, FXCM repeatedly represented to and warned its customers of the significant risks of trading FX and that such trading is appropriate only for individuals who can assume risk of loss in excess of their investment and margin deposit.”
FXCM went on to explain that all clients were required to sign waivers prior to engaging in any currency trades.

As far as FXCM is concerned, the brokerage was a "victim of the SNB Event" and the CFTC has no grounds to file an undercapitalization violation claim in such unprecedented circumstances.

About Author: author Steve Todorov is the founder of Razor-Forex.com, an ardent digital currency enthusiast and Forex trader. Read More...

Join him on Google+ | Reddit | Twitter

0 comments :

Post a Comment