Who said Forex brokers always come out on the short end of the stick when dealing with US regulators?
In two cases brought to the NFA for arbitration against FXCM, arbitrators decided in favor of the broker. The claimants, customers Jeff Cummings and Montana Rio LCC, brought allegations against FXCM last year for “Accounting; Fraud; Breach of Contract; Breach of Fiduciary Duty; Violation of the Commodity Exchange Act, 7 U.S.C.§ 1, et seq.; violation of Racketeer Influences and Corrupt Organizations Act, 18 U.S. C. § 1961, et seq.; and Violation of New York Business Law 349(b)”. The claim amounts of the cases were for $500,000 and $150,000 respectively. Against the allegations, FXCM filed counterclaims of $50,000 for attorney fees and costs as they stated that the claimants were “improperly seeking damages to which it is not entitled."
Deciding on the case yesterday, NFA arbitrators dismissed the claims from both Cummings and Montana Rio. Based on the claims being called “frivolous”, arbitrators also decided in favor of FXCM’s counterclaim, awarding the broker $50 from each claimant (Well clear of the $50,000 counterclaim, but indicating that the NFA wasn't impressed with the claims against FXCM).
The claims were part of the NFA’s arbitration resolution program for deciding disputes between customers and NFA members. The decision by the NFA in favor of FXCM is similar to the regulator overturning a court decision against GAIN Capital earlier this year.
