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.

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

Digital Assets

Ethereum-Based Tokenized Real Estate Platform USP Launches On Republic

How This Californian Startup Is Revolutionizing Real Estate Investment through Ethereum-Based Tokenization.

Digital Assets

Sui Spikes in Weekly DEX Volume, Joins Top 10 of All Blockchains

March DEX volume on Sui stands at over $2.88B – up more than 49% from February – with decentralized exchange Cetus and wholesale liquidity layer DeepBook leading.

Digital Assets

Prisma Finance suffers $10 million crypto exploit, attack ongoing

Liquid staking protocol Prisma Finance fell victim to a security exploit on March 28, resulting in nearly $10 million in Prisma mkUSD and wrapped stETH being stolen by hackers.

Digital Assets

Masa and LayerZero: Bridging Blockchains for Data Sovereignty

Masa Network is poised to revolutionize the personal data landscape with its upcoming launch as a cross-chain platform, making it accessible on a variety of blockchains right from the start.

Digital Assets

Big Time Generates over $100M in Revenue since Preseason

Innovative game developer Big Time Studios announces that its highly anticipated free-to-play multiplayer action/MMO RPG Big Time, has generated $100M in revenue. According to the team, players transacted a total volume of over $230M, without selling a single token.

Digital Assets

Centralized exchanges are 10 times more popular than DEXs in Western Europe

Western European traders are found to prefer centralized exchanges over decentralized ones as CEX traffic outpaces DEXs by a factor of ten.

Market News

Stock Market Analysis: Is NVDA Losing Its Leadership?

Since the beginning of the week, the S&P 500 Index (US500) has seen a modest increase of about 0.58%, whereas NVDA’s share price has experienced a decline of approximately 3.8%. This recent divergence raises concerns among Nvidia stock investors — could it signify a loss of NVDA’s market leadership?

Industry News

ESG: Australian regulator wins first greenwashing court case against Vanguard

Vanguard admitted that a notable portion of the securities within both the Index and the Fund did not undergo the promised ESG scrutiny.

Fintech, Uncategorized

BitMEX integrates HALO from Solidus Labs for cross-market surveillance

“The recent approval of the Spot Bitcoin ETF has piqued the market’s interest. As a result of price volatility, the trading volumes for crypto derivatives have gone up substantially. HALO, with its advanced technology and crypto-native detection architecture, will enable BitMEX to smoothly and safely scale trade surveillance across its increased trading volumes and provide the necessary safeguards for new product launches.”

<