Nadex bans member over illegitimate fraud claim
Evan Watson gets banned from trading on Nadex after findings that the documentation and information he submitted to Nadex in support of his fraud claim was falsified, altered and/or fraudulently prepared.
North American Derivatives Exchange (Nadex), a subsidiary of IG Group Holdings plc (LON:IGG), has taken another disciplinary action against a member who violated its rules. In a notice published on its website, the Exchange announces that it has banned Evan Watson over violations of a set of rules, dedicated to prohibited transactions and activities.
The rules that Watson violated include:
RULE 5.19 PROHIBITED TRANSACTIONS AND ACTIVITIES
- (k) No Person shall intentionally provide misleading, erroneous, or fraudulent information to Nadex on a membership application or otherwise.
- (o) No Member shall deposit funds into its Nadex account from an account which does not hold sufficient funds at the time of deposit, and at the time the deposit is presented by Nadex for payment.
- (q) No Member shall allow its settlement account balance to become negative by any means. In the event that a Member’s settlement account balance becomes negative, the Member must immediately deposit additional funds to correct the deficiency . . . .
In December 2017, Evan Watson filed a fraud claim with Nadex related to numerous alleged unauthorized transactions from his bank accounts. The Compliance Department determined that the documentation and information Watson submitted to Nadex in support of his fraud claim was falsified, altered and/or fraudulently prepared.
In addition, despite his statement that he was unaware of any other Nadex Member, Watson in fact shared connections with several other Nadex Members. Accordingly, Nadex concluded Watson’s fraud claim was illegitimate. Separately, the Compliance Department also discovered that Watson had made ACH deposits to his Nadex account which failed to clear as the result of insufficient funds at time of deposit, resulting in a negative balance in his Nadex account.
The Compliance Department concluded that Watson violated Nadex Rule 5.19(k) when he provided false and/or misleading information in connection with the fraud claim he made to Nadex. Further, Watson violated Nadex Rules 5.19(o) and 5.19(q) when he deposited funds into his Nadex account from a bank account that did not have sufficient funds at the time of the deposit, which resulted in a negative balance in his Nadex account.
As a result of his non-compliance with the Nadex Rules 5.19(k), 5.19(o), and 5.19(q), Evan Watson has been fined $3,000. His membership has been revoked and he has been permanently banned from trading on the Nadex markets by any means.
The ban got into effect on April 29, 2019.
Nadex has lately been very active in taking disciplinary actions against individuals that violate the rules of the Exchange. Earlier this month, for instance, Nadex revoked the membership of Pengfei Gui over breach of Nadex Rules that prohibit members from providing misleading, erroneous, or fraudulent information to Nadex.