The Commodity Futures Trading Commission (CFTC) has presented its stand before the Seventh Circuit Court of Appeals in the United States. The regulator also got an extension in a lawsuit against the National Futures Association (NFA) to make its opinion clear. The suit is in respect to the exodus of the brokers from the retail forex market. This came after the CFTC and NFA striking a deal with Forex Capital Markets LLC (FXCM) in early February.
Interests in the Case
The CFTC has made the appeals court known that it has an interest in the case at least on two accounts. The first is that the court sought its amicus brief. The second is that the district court has addressed an issue that impacts the statutory responsibility of the regulatory to review disciplinary proceedings of NFA. The agency has filed these documents with the court. It all started when the NFA filed a complaint against FXCM on February 6, 2017.
Among the several alleged complaints, NFA charged FXCM of engaging in fraudulent advertising thus violating the rules of the association. Further, the organization charged FXCM of offering ‘No Dealing Desk’ model in its forex transactions for retailers. On the other hand, the complaint alleged that the accused firm directed several of its trades to Effex Capital, LLC, which is a liquidity provider. Incidentally, the FXCM is having management control of Effex.
Effex paid rebates to FXCM
On top of these, the complainant accused Effex of paying rebates to FXCM apart from abusing of execution tactics benefiting both the companies. On the other hand other, customers were the losers due to these actions. FXCM has preferred to settle the complaint with NFA while not denying or admitting the alleged charges. These unfolding events are not only posted on the NFA website but also reported through a press release.
When everything seemed over, Effex and its CEO, John Dittami, had dragged NFA and its employees to court on June 6, 2017. The complaint alleged false statements and that there was no opportunity for Dittami and Effex to defend them. However, the district has dismissed the case on April 5 for failure to use administrative remedies. Now that the affected parties have taken the matter to the Court of Appeals, CFTC’s opinion is sought on a number of issues. The court has fixed April 29 for getting responses from Effex and NFA.