NFA fines Gain Capital for deducting $3M from customer accounts

abdelaziz Fathi

The US National Futures Association (NFA) has filed and settled enforcement actions against Gain Capital Group LLC, the largest retail FX broker in the United States.

GAIN Capital’s annual stockholders’ meeting to include vote on election of Edison Venture exec Christopher Sugden as Class 2 director

Gain Capital and its CEO Alexander Robert Bobinski were ordered to collectively pay a civil penalty of $700,000 for making changes to client accounts without permission. The industry self-regulatory organization said this action was against NFA Compliance Rule 2-43(a) (1), which prohibits forex dealers from adjusting customers’ orders to rectify certain situations that are beyond their control.

Spacifically, GAIN’s trading platform was impacted by a system malfunction between March 31 and April 1, 2021. During this period, some users were able place stop and limit orders in 14 currency pairs at prices that differed from those shown on’s platform. As a result, the broker incurred losses to the tune of $3 million.

To remedy the situation, Gain’s staff reviewed trade records and identified customers who executed orders at the off-market prices. Then, Gain immediately canceled pending withdrawals from their accounts and froze their accounts to prevent any future withdrawals or trading.

Later on April 1, 2021, Gain negatively adjusted the accounts of the seven most-affected customers, clawing back the profits they made. A day later, Gain also made adjustments to the accounts of other customers who had executed smaller trades during the system malfunction, crediting or debiting accounts down to a threshold of $10.

In total, GAIN deducted around $2.84 million from the accounts of 17 clients and added nearly $35,000 to the accounts of 33 consumers. Gain’s CEO Bobinski personally approved these negative and positive adjustments, as well as the threshold of $10.

The NFA said the actions taken by Gain Capital were inconsistent with its compliance rule that “prohibits Forex Dealer Members (FDMs) from cancelling an executed customer order or adjusting a customer account in a manner that would have a direct or indirect effect of changing the price of an executed order.”

The statement further states that the NFA emailed Bobinksi and Gain’s CCO and specifically reminded them of its prohibition on negative account adjustments. However, the firm delayed remedying its violations and did not reverse debits or provide still-pending credits to affected customers.

“In its Decision, the BCC found that Gain violated NFA Compliance Rule 2-43(a)(1) by improperly adjusting customer accounts, following a system malfunction; violated NFA Compliance Rule 2-36(c) by its treatment of customers affected by the system malfunction and Gain’s account adjustments; violated NFA Compliance Rules 2-5 and 2-36(c) by submitting inaccurate and incomplete information to NFA; and violated NFA Compliance Rules 2-36(e) and 2-9(a) by failing to supervise. The BCC also found that Bobinski violated NFA Compliance Rule 2-36(e) by failing to supervise,’ the statement concludes.

Read this next

Digital Assets

Point72 invests $77.5 million in Bitcoin, Morgan Stanley holds $269.9 million

Point72, the $34 billion hedge fund owned by billionaire and New York Mets owner Steven Cohen, held $77.5 million in the Fidelity Wise Origin Bitcoin Fund (FBTC) at the end of the first quarter, according to a recent filing.

Digital Assets

Binance claims Nigerian officials sought $150 million bribe

A Nigerian court has ruled that Tigran Gambaryan, a Binance executive detained on charges of tax evasion and money laundering, can stand trial on behalf of the world’s largest cryptocurrency exchange.

Digital Assets

Kraken reviews Tether listing in Europe ahead of MiCA adoption

Cryptocurrency exchange Kraken is “actively reviewing” whether to delist the stablecoin Tether (USDT) from its European platform, according to a report by Bloomberg.


Discover How MoonBag Coin Presale Stacks Up Against Dogecoin & Litecoin

Discover how the MoonBag Coin presale compares to Dogecoin and Litecoin, with unique features, a robust presale structure, and new opportunities in 2024.

Fundamental Analysis, Market News, Tech and Fundamental

Global FX Market Summary: Federal Reserve Policy, USD, May 17 ,2024

Overall, both the Federal Reserve’s policy and the US dollar’s outlook are shrouded in some degree of uncertainty.

Market News, Tech and Fundamental, Technical Analysis

Ethereum Technical Analysis Report 17 May, 2024

Ethereum cryptocurrency can be expected to rise further toward the next resistance level 3200.00, which is the top of the previous impulse wave i.

Digital Assets

Hong Kong adopts digital yuan payments through Chinese banks

Hong Kong has launched a pilot program enabling digital yuan payments through major Chinese banks, marking the first instance of China’s digital currency project being deployed outside the mainland.

Retail FX

Saxo Bank increases client assets five-fold to $116 billion

Copenhagen-based broker Saxo Bank has achieved a major milestone, surpassing $116 billion (DKK 800 billion) in client assets.

Inside View

ISDA says US Basel III “endgame” to heighten market risk capital

ISDA further explained that, by requiring banks to hold additional capital that is misaligned with levels of risk, the proposal would significantly reduce capital market access for US end users and businesses, restrict the ability of businesses to hedge exposures to changes in commodity prices, and increase the cost of everyday consumer goods, including food and gasoline.