Judge: Findings by NFA would still be findings, even if release about FXCM is taken down

Maria Nikolova

“I don’t know if I have seen anything like that done before in a regulatory context”, says Judge Andrea R. Wood when reviewing the request by Effex Capital to take down NFA’s website materials about FXCM from February this year.

Fed’s Brainard cautious over boom of blockchain technology

FinanceFeeds has been keeping its readers updated on the latest developments in the case brought by Effex Capital, the company implicated in FXCM’s US exit because of its business ties with the broker, against the United States National Futures Association (NFA).

In brief, the case alleges that NFA overstepped its powers when mentioning the name of Effex in the materials about FXCM, made false claims about Effex and caused it heavy damage. The plaintiffs demand, inter alia, that NFA takes down the materials about FXCM from its website and that the Association issues a statement clearing the names of Effex and its CEO John Dittami.

Today, the restrictions on the Transcript of the first status hearing on the case before Judge Andrea R. Wood were lifted and FinanceFeeds got access to the document. The transcript is valuable to the degree that it offers an insight about the first reaction of the Court when hearing about the complaint and the parties’ initial arguments.

Although we have been able to get details about the positions of the plaintiffs and the defendants, this is the first time we get to have an idea on the Court’s stance on this case.

Judge Andrea R. Wood reacts with what may be dubbed as surprise when reviewing the request by Effex Capital’s regarding the press materials about FXCM on NFA’s website:

“So your request is you want the notice to be taken down, the findings, and whatnot. Presumably – well, beyond that, are you asking for some sort of retraction?

I don’t know if I have seen anything like that done before in a regulatory context.

But even if the notice is taken down, the findings by the NFA would still be the findings. And to the extent somebody pulled up that order or inquired of the findings, they would still get the same information.”

Apparently, the removal of the content is not seen as the best option by the Court (although the case is not over and no conclusions should be made at this point.) But the plaintiffs push for that and also for a release stating that NFA made no findings about Effex and its CEO John Dittami.

From the rest of the transcript, which, as one may expect, represents a rather formal text, it becomes clear that the Judge is interested in: the immunity status of NFA; and the particular damage caused by the materials on the NFA website about FXCM to Effex and its CEO.

The latest document that NFA submitted with the Court alleges that Effex Capital did not exhaust all possible means of objecting to its findings before turning to Court. NFA argues that it is up to the Commodity Futures Trading Commission (CFTC) and not to the Court to determine whether NFA erred in how it handled the FXCM proceeding, and whether NFA should be required to change its rules along the lines Effex suggests.

The case, captioned Effex Capital, LLC et al v. National Futures Association et al (1:17-cv-04245), continues at the Illinois Northern District Court.

Read this next

Retail FX

eToro is latest platform to suspend Terra’s LUNA, Binance resumes trading

Israeli social trading network eToro has become the latest platform to suspend trading on the Terra (LUNA) cryptocurrency in light of a market-wide downturn.

Industry News

UK court allows ThinkMarkets’ “obscure” B-book claims against IS Prime

“The Judge added that “Think did need to address the concerns expressed” as its counterclaim “suffers from a lack of detail, obscurity and potential inconsistency”.

Retail FX

Brazilian Broker XP launches crypto trading to 3.5M users

XP Inc (XP.O) is set to launch a crypto trading platform, dubbed ‘XTAGE’, as Brazil’s largest broker is looking to tap into the growing interest in trading bitcoin and other digital assets.

Retail FX

easyMarkets adds MT5 as demand for platform continues to grow

easyMarkets has joined a growing group of brokers in switching over to MetaTrader 5 (MT5), becoming the latest retail platform to incorporate the platform into its live trading infrastructure.

Institutional FX

SGX’s FX volume shines in a largely lackluster April

The Singapore Exchange (SGX) notched a healthy gain in its FX and indices volumes, despite seeing a wavering performance across commodity and securities segments.

Industry News

Devexperts webinar: Attracting retail traders with fractional trading

Following the successful webinar on introducing crypto to retail investors, Devexperts is returning to host a new one about fractional trading. 

Digital Assets

Relai to launch bitcoin debit card to unlock BTC via every purchase

To attract more retail investors to the crowdfunding project, Relai has promised 0% fees on transactions on the Relai app for those who invest €5,000 or more.

Digital Assets

Amid crypto meltdown, Tether reduces corporate debts in USDT reserves

Tether, which is closely affiliated with crypto exchange Bitfinex, has drastically reduced its holdings of commercial debt in its reserves over the last six months. Instead, the stablecoin issuer allocated most of its non-fiat reserves to Treasury bills, almost doubling assets in short-term government securities.

Industry News

TrustPay launches SEPA instant payments

” Our clients will now be able to make instant transactions with the immediate settlement of funds, which makes business more effective in today’s fast world.”