Effex Capital reiterates claim for money damages over NFA’s announcement about FXCM

Maria Nikolova

Effex tells Court that it seeks money damages to redress past violations of due process of law under the Fifth Amendment to the United States Constitution.

Effex Capital, the company whose relationship with FXCM played a vital role in the events that led to the broker’s exit from the US retail Forex market, has reiterated its claims against the National Futures Association (NFA).

As FinanceFeeds has reported, Effex and its CEO John Dittami are appealing the decision of the Illinois Northern District Court which dismissed their complaint against NFA. Whereas Effex and its CEO insist that NFA’s materials about its action and settlement with FXCM from February 6, 2017, included false and defamatory statements about Effex, the District Court had sided with NFA saying that any such complaint should have been taken to the CFTC first.

Shortly after Effex and its CEO took the matter to the Seventh Circuit U.S. Court of Appeals, the Court informed the Appellants that their docketing statement had failed to address some matters. For instance, the statement failed to set forth the federal statute or constitutional provision involved in this case. Put otherwise, the appellants had to explain what is the federal question at the basis of their appeal.

In response, on Wednesday, May 9, 2018, Effex Capital and Dittami submitted an amended Docketing Statement.

They explain that their Second and Third Claims involve federal questions. The claims in question are from Effex’s complaint against NFA filed in July 2017. More specifically, Appellant’s Second Claim seeks injunctive relief to redress ongoing deprivations without due process of law and the Third Claim seeks money damages to redress past violations of due process of law under the Fifth Amendment to the United States Constitution.

The Fifth Amendment to the United States Constitution provides: “nor shall any person . . . be deprived of life, liberty, or property, without due process of law.”

Let’s recall that under the second and third claims made by Effex and Dittami, NFA’s website publication of the allegedly false statements regarding Effex, without providing either notice or an opportunity to be heard, or a post-deprivation remedy, violates the due process clause of the Fifth Amendment. Effex and Dittami argue that they have suffered reputational stigma together with a loss of their Trade Secrets as well as business opportunities in their chosen occupational field, in violation of their right to pursue their chosen occupation or business, a liberty interest protected by the Fifth Amendment.

Effex and Dittami request injunctive relief requiring NFA to: (i) remove the NFA Complaint, Decision, Narrative and Press Release from its website or, in the alternative, to provide a name clearing hearing, or in the alternative, delete all references to Effex and Dittami in the Narrative; and (ii) issue a new release stating: (a) NFA did not make any findings against Effex or Dittami; (b) Effex was not functioning FXCM’s own de facto dealing desk; (c) Effex was not controlled by FXCM; and (d) FXCM was not ordered to make any customer restitution.

According to Effex and Dittami, they are entitled to money damages in an amount in excess of $10,000,000, as well as punitive damages with the precise amount to be determined at trial.

The Court has scheduled a telephonic mediation in this appeal for May 31, 2018.

Read this next

Education, Fintech, Inside View

How to Get Into Fintech: Best Tips to Succeed

The Fintech sector is experiencing significant growth, with fresh opportunities emerging rapidly.  Innovations such as machine learning and cryptocurrency are revolutionising finance, leading to a need for trained experts.

Digital Assets

FalconX launches Prime Connect on Deribit

“We are pleased to launch Prime Connect with Deribit and look forward to providing our full suite of prime services which allow institutions to confidently scale their digital assets portfolios while trading on exchanges.”

Retail FX

Lion launches multi-currency trading accounts powered by AI

The core advantages of multi-currency trading account services include enabling significant cost savings and higher efficiency for investors.

Inside View, Interviews

Interview: Stanislav Bunimovich on Finalto’s white label solution

To explore what makes Finalto’s white-label solutions stand out in such an incredibly competitive market, Finalto sat down with its Chief Operating Officer, Stanislav Bunimovich, for an interview. 

Digital Assets

Talos acquired Cloudwall for a better portfolio management system

Cloudwall’s additional expertise in portfolio risk systems further positions Talos at the forefront of portfolio management systems across spot, futures, perps, and options.

Digital Assets

Bybit’s Bitcoin market share explodes, up by 400%

“This milestone is a testament to our sharp trading products and the loyalty of our users. As the industry evolves, Bybit remains at the forefront, ready to set new standards in the crypto trading world.”

Crypto Insider

Why Self-Custody is the Key to Secure Crypto Trading

Crypto trading is fast gaining popularity; as of writing, the total market capitalization stands at $2.3 trillion, double what it was at the onset of the 2021 bull market.

Industry News

UK FCA sues Lee Steven Maggs for FX scam Kube Trading

‘Kube Trading’ allegedly received around £2.67 million for FX trading and concealed significant losses from investors.

Market News

AUD/USD Soars Following Inflation Report

Australia’s CPI surge hints at prolonged tight monetary policy. Watch the Aussie dollar as US economic data looms.