CFTC fines EOX Holdings, Futures International, and OTC Europe for net capital deficiencies
EOX, Futures International, and OTC Europe will each have to pay a civil monetary penalty in the amount of $120,000.
The United States Commodity Futures Trading Commission (CFTC) today filed and settled charges against three registered introducing brokers (IB) – EOX Holdings LLC; Futures International LLC ; and OTC Europe LLP, for failure to meet minimum adjusted net capital requirements.
EOX, Futures International, and OTC Europe will each have to pay a civil monetary penalty of $120,000 and to cease and desist from further violations of the Commodity Exchange Act (CEA) and CFTC regulations. The regulator recognizes each IB’s remediation and cooperation to ensure that they meet their obligations as registrants.
The CFTC has found that EOX, Futures International, and OTC Europe improperly accounted for deductions arising out of their agreement to guarantee a revolving line of credit for an affiliated company in computing their adjusted net capital. During the period in which the three IBs were guarantors of drawdowns on the revolving line of credit, funds were drawn on the line of credit on a monthly basis for the benefit of the affiliated company, in amounts ranging from $10 million to $26 million . None of the three IBs deducted the amount of the guaranteed drawdown in its calculation of adjusted net capital as required.
Had they done so, the net capital of each IB would have fallen below the adjusted net capital required by the CEA and CFTC regulations, with resulting deficits ranging from approximately $9 million to $25 million.
