US Court Slaps $7 Million Fine on TFS-ICAP for Misleading Clients

A New York district court has slapped a heavy fine of $7 million on the two entities of Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term options broker TFS-ICAP, one in New York and the other in London, for major market misconduct and deceiving clients.

The US Commodity Futures Trading Commission (CFTC CFTC The 1974 Commodity Exchange Act (CEA) in the United States created the Commodity Futures Trading Commission (CFTC). The Commission protects and regulates market activities against manipulation, fraud, and abuse trade practices and promotes fairness in futures contracts. The CEA also included the Sad-Johnson Agreement, which defined the authority and responsibilities for the monitoring of financial contracts between the Commodity Futures Trading Commission and the Securities and Exchange Commiss The 1974 Commodity Exchange Act (CEA) in the United States created the Commodity Futures Trading Commission (CFTC). The Commission protects and regulates market activities against manipulation, fraud, and abuse trade practices and promotes fairness in futures contracts. The CEA also included the Sad-Johnson Agreement, which defined the authority and responsibilities for the monitoring of financial contracts between the Commodity Futures Trading Commission and the Securities and Exchange Commiss Read this Term) dragged TFS-ICAP LLC and TFS-ICAP Ltd to the District Court for the Southern District of New York and was fighting the legal battle for a long time.

The judgment came as the interdealer broker already admitted the involvement of its employees in the misconducts, popularly known as ‘flying prices’ and ‘printing trades’.

The CFTC detailed that, between January 2014 and August 2015, TFS-ICAP represented to its US bank clients with bids or offers for an FX option at a particular level, but in reality, no other counterparties bid or offered options at that level. Both the New York and London entities of the interdealer broker further falsely communicated to clients that traders were executed on their behalf.

Failure of Leadership

Apart from the companies, the court held TFS-ICAP former CEO, Ian Dibb and its former Emerging Markets desks head, Jeremy Woolfenden accountable for their failure in supervision. Both of them were fined $500,000 each and agreed to forfeit their CFTC registrations.

“Brokers and other intermediaries play a critical role in our markets. The CFTC will act to ensure that these entities communicate and report honest and accurate pricing information to protect the integrity of the markets,” Vince McGonagle, CFTC’s acting Enforcement Director, said.

“We are also committed to holding corporate managers who have regulatory supervisory responsibilities accountable to ensure policies and procedures are in place that would have prohibited and could have deterred, unlawful conduct from occurring.”

To prosecute TFS-ICAP, the CFTC worked with the UK’s Financial Conduct Authority (FCA). Furthermore, the London regulator fined the interdealer broker £3.44 million last month for market misconduct.