On December 16, 2009, NFA issued a Complaint charging FXT with cheating, defrauding or deceiving another person or attempting to do so; presenting hypothetical performance without required disclaimers and information; failing to submit promotional material prior to first use; failing to provide customers with a disclosure document; and failing to cooperate with NFA. The Complaint also charged FXT and Arena with willfully submitting false or misleading information to NFA; and failing to supervise.
Amongst other things:
Beginning in June 2009, NFA received several customer complaints against FXT and determined to further investigate FXT and Arena’s activities. During followup interviews of the customer/complainants, NFA learned that contrary to representations that FXT had made to NFA, FXT was managing forex customer accounts. NFA subsequently obtained trading records from firms that carried FXT’s managed forex accounts. NFA’s analysis of these trading records revealed that FXT’s managed forex accounts had suffered significant losses during 2009. This losing performance was consistent with FXT’s previous history. As NFA’s 2008 audit of FXT revealed, from January through June 2008, not one of FXT’s managed accounts experienced a net gain and, on average, experienced a net loss of 7%.
ANSWER:
On January 20, 2010, FXT and Arena filed an Answer to the Complaint in which they denied the material allegations contained therein.
On February 23, 2010, FXT was ordered not to apply for NFA membership or principal status with any NFA Member. Arena was ordered not to apply for NFA membership, associate membership or principal status with any NFA Member.
Frankly, I’m shocked, shocked to learn that an account manager lost customer money trading forex — and an average of 7% no less! Surely a glaring exception to the experience of the vast majority of FX account managers and retail traders who have found forex to be an wellspring of extraordinary profit opportunities.
Your “post” sounds remarkably like regulator-speak. Why not just post the entire press release, Michael?