Nadex takes disciplinary action against one of its Members

Maria Nikolova

Nadex’s Compliance Department has recommended termination of Sun-Je Pearlman’s Nadex Membership and that he be permanently banned from the Exchange.

North American Derivatives Exchange, Inc. (Nadex), a subsidiary of IG Group Holdings plc (LON:IGG), has issued a notice detailing its disciplinary action and final decision against one of its Members.

The Member in question is Sun-Je Pearlman. Nadex’s findings show Mr Pearlman opened an account and started trading on June 29, 2016. He entered multiple transactions through the evening of July 4, 2016 and generated considerable profits. However, after his account reached its peak on July 4, he began losing and eventually lost approximately all of his profits as well as the deposits he had made to his account.

On July 6, 2016, Mr. Pearlman contacted Nadex Client Services alleging that his account had been hacked and that some deposits made to the account were unauthorized. In addition, he claimed that he did not enter numerous transactions that occurred in his account. More importantly, Mr. Pearlman requested a refund to reset his balance to its highest level, that is, the level from the evening on July 4.

Nadex’s Compliance Department conducted a thorough investigation of Mr. Pearlman’s claims, and did not find evidence to support his allegations. Therefore, there was no justification for a return of funds.

Having learnt of the Compliance Department’s decision not to refund any money, Mr. Pearlman initiated chargebacks for all deposits that had been made to his account, including those deposits he admitted he had made. Given that funds deposited to the account had already been used to trade, as the result of the chargebacks Mr. Pearlman’s account incurred a negative balance.

Nadex’s Compliance Department has determined that Mr Pearlman violated Rule 5.19(p) which prohibits a Member from making a false statement that would result in a chargeback, as well as Rule 5.19(q) which prohibits a Member from allowing his account to become negative, and requires that in the event the account becomes negative, he must immediately deposit additional funds to correct the deficiency.

The Compliance Department has recommended termination of Mr. Pearlman’s Nadex Membership and that he be permanently banned from the Exchange.

The effective date of the notice is February 2, 2017.

Read this next

Digital Assets

Zumo launches B2B ‘Crypto-as-a-Service’ solution for brokers

The new product, Zumo Enterprise, also features an embedded ESG and net zero strategy.

Technology

Top Tools to Add to Your Trading Platform to Delight and Retain Traders

The online trading boom that started during the pandemic-led lockdowns is abating. This is in part due to sustained market volatility which seems to be discouraging new investors. For example, day trading volumes in the US for retail investors declined in the last 2 quarters of 2021.  

Technology

Embedded finance platform Alviere taps Marqeta for branded card issuance in Europe and UK

Alviere has recently raised $70 million to fuel the ongoing expansion across the European region and the United Kingdom.

Retail FX

Overcharts partners with dxFeed for CME Group Market Depth

“More and more traders are using Market Depth while conducting volume analysis. Its primary function is to help traders identify potential support and resistance levels.”

Digital Assets

CoinGecko expands collaboration with CER.live security rating

CoinGecko, one of the earliest crypto data aggregators, has integrated the security score data from the CER.live rating. The trust assessments given to crypto projects will be integrated into their pages on CoinGecko website to draw users’ attention to the importance of security.

Metaverse Gaming NFT

Klaytn taps Parity Technologies to build infrastructure for Klaytn-Substrate

Klaytn has initiated a collaboration with blockchain infrastructure company Parity Technologies to strengthen its tech stack and meet the demands of enterprises looking to harness the crypto technology.

Retail FX

US Retail FX brokers suffer steep fall in client deposits, Trading.com racked up $46K

Retail FX deposits at US brokerages, which have been struggling to eke out a profit in a strict regulatory environment, dropped in March 2022 by $35 million, CFTC data showed.

Retail FX

eToro supports Immutable X (IMX), Livepeer (LPT) and Cartesi (CTSI)

Israeli social trading network eToro has added support for trading three new tokens. Immutable X (IMX), Livepeer (LPT) and Cartesi (CTSI) are the next coins to join eToro’s list of featured digital assets.

Executive Moves

LiquidityBook hires Fintech veteran Jonathan Cross to lead EMEA business

LiquidityBook, a provider of FIX and OMS trading solutions for both the buy and sell-side, has added Jonathan Cross to its business team for the EMEA region.

<