Nadex bans trading member over failure to disclose he was subject to CFTC enforcement action
Kevin Whylie violated Nadex rules when he failed to notify the Exchange that he was subject to regulatory proceedings before the CFTC and that he had his trading privileges suspended.
North American Derivatives Exchange (Nadex), a subsidiary of IG Group Holdings plc (LON:IGG), has taken disciplinary action against one of its Members who had failed to make proper disclosures.
In a notice on its website, Nadex explains that its Compliance Department launched an investigation into Member Kevin Whylie upon notice that he was the subject of a Commodity Futures Trading Commission (CFTC) enforcement action. The CFTC action against Whylie concerned pool fraud, misappropriation of funds, and registration violations. As a result, of the CFTC action, Whylie was assessed monetary penalties, and was permanently banned from trading and from CFTC registration.
Whylie violated Nadex Rule 3.3(d) as he failed to notify the Exchange that he was subject to regulatory proceedings before a Regulatory Agency and that he had his trading privileges suspended.
Furthermore, as part of its enforcement action, the CFTC determined that Whylie committed various registration violations in connection with a non-registered entity. As such, Whylie violated Nadex Rule 5.19(m) when he acted in a capacity that required him to register with the CFTC without obtaining the proper registration.
Finally, Whylie violated Nadex Rule 3.3(a) and the Member Acknowledgements and Authorization Section (h) of the Membership Agreement when he failed to cooperate with the Compliance Department during the investigation.
As a result of these violations, Whylie’s Nadex membership has been revoked, his account has been terminated, and he has been permanently banned from trading on the Exchange.
In a similar action in October 2018, Nadex revoked the membership of Carlos Evertsz over his failure to inform the Exchange of prior regulatory action. After Evertsz had submitted his Membership application to the Exchange on April 29, 2018 and had deposited the requisite minimum deposit amount, Nadex’s Compliance Department received an alert from its third party background service regarding prior regulatory action pertaining to Evertsz. The alert indicated that he was the subject of two Financial Industry Regulatory Authority (FINRA) matters, both of which resulted in trading suspensions. Moreover, he had been barred from affiliation with any FINRA member in any capacity.