George Ashkar, a former sole principal of Fortress Capital, Inc. (Fortress), agreed not to apply for associate membership or principal status with the National Futures Association for five years to resolve administrative charges brought by NFA.
Fortress, which was also barred for the same period, is a former NFA-member operating as an introducing broker, commodity trading advisor, and Forex firm. The bans follow an NFA Hearing Panel and complaint filed by the regulator’s Business Conduct Committee.
These violations included failure to record assets and liabilities and repeatedly submitting inaccurate financial statements, as well as the use of misleading promotional materials. In addition, Fortress failed to maintain minimum adjusted net capital, even though the firm was in a position to identify and stop the abuses.
After NFA informed Fortress of this capital shortfall, the broker obtained a capital infusion that brought it above its net capital requirement. However, the company did not report this capital deficiency with NFA until the end of February 2014.
Fortress has been an NFA member since 2010. Besides its futures and forex business, the company operated a number of other activities through its affiliated entities.
NFA's probes into Fortress’ operations identified several deficiencies, including placing trades on behalf of some investors without obtaining the required written authorization to do so. Last year, the NFA introduced new amendments that require forex dealer members to provide additional trade disclosures and firm-specific information that include commissions and any other fees.
Fortress helps traders avoid US regulations
The Chicago-based regulator, which is responsible for policing the US futures industry, also outlined additional deficiencies, including incomplete KYC procedures and lapses in the solicitation of customers.
More interestingly, the NFA also found promotional material posted to another website run by Fortress called "Fortress Capital Trading Academy," which was accessible through a link on its main website. The Trading Academy website contained a forex educational program which Fortress offered for a fee of $1,245.
This website contained videos and articles produced by a former executive called Joseph Gelet, who worked at Fortress from January 2013 to May 2017. Gelet’s biography described him as an "expert Forex consultant” who developed an "in-depth Forex training course which has helped many Wall St. professionals and international investors understand the nuances of Forex."
However, the NFA said that Fortress was unable to provide any support for either of those super qualifications. The Trading Academy site also included detailed instructions advising clients how to avoid US regulations by opening an account in a foreign jurisdiction under the name of a friend and offering to pay him a percentage of the investment profits.
