The National Futures Association (NFA) in the United States has brought a total penalty of $350,000 against a London-based introducing broker, GMG Brokers LTD, and two employees for engaging in deceptive conduct and failing to observe high business standards, among other things.

NFA Fines GMG Brokers

The self-regulatory organization passed two orders to impose the penalty. One was against GMG, imposing a monetary penalty of $225,000, which also named the CEO, Marco Saviozzi, asking him to share liability with the firm jointly and severally to the amount of $50,000.

The other order was against Jason Terence Lyons, another GMG employee, who needed to pay a fine of $125,000. In addition, he has to withdraw his membership from the NFA associate membership before 1 May 2023. On top of that, he faces a four-month ban from NFA associate membership and principal status.

Severe Deception and Violation of Compliance Rules

GMG was founded in 2009 and operated from its offices in Dubai and London. The NFA membership as an introducing broker allows the company to take clients from the United States.

According to the two NFA orders, GMG and Lyons violated multiple compliance Compliance In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a Read this Term rules.

"The Complaint alleged that GMG and Lyons violated NFA Compliance Rules 2-2(a) and 2-4 by engaging in deceptive conduct, failing to observe high standards of commercial honor and just and equitable principals of trade, and acting contrary to their customers' best interests through Lyons' misleading communications with GMG customers and in trading activities that placed GMG and his interests — as well as the interests of a 'favored' GMG customer — ahead of other GMG customers to generate additional brokerage fees," the official notice stated.

The introducing broker and the two employees agreed to a settlement by paying the penalty but did not admit or deny the charges.

Meanwhile, the NFA has recently imposed heavy penalties on some companies for compliance violations. StoneX-owned GAIN Capital was fined $700,000 last December, only months after Marex and Interactive Brokers paid $250,000 each.