NFA fines Lime Trading $100,000 for untimely regulatory reporting

Rick Steves

The National Futures Association (NFA) has ordered Lime Trading to pay a $100,000 fine over failing to file various required financial reports and notifications timely with the US regulator, as well as failure to supervise.

Lime Trading, which is a futures commission merchant Member of NFA located in New York, settled without admitting nor denying the allegations.

The complaint claimed Lime Trading violated NFA Financial Requirements Sections 1(e) and 16(e) as well as NFA Compliance Rule 2-9(a). In its decision, NFA’s Business Conduct Committee agreed with the charges.

Lime Trading repeatedly filed statements shortly after the deadline

Lime Trading became an NFA member in August 2016 when the firm registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker (IB). In October 2020, the firm registered as an FCM, at which time it withdrew as an IB. The brokerage firm is regulated by FINRA and active as a broker-dealer. Lime Trading was formerly known by several other names, including Score Priority Corp and Whotrades.

The NFA claimed, “Lime Trading’s conduct over the past two years illustrates an inability and/or reluctance by firm personnel to understand and pay attention to regulatory obligations”. Said conduct includes repeated failure to comply with its financial reporting deadlines and inadequate measures to ensure its filings are timely, despite directives from NFA and the CFTC. Lime Trading’s conduct also involves an inadequate understanding of its regulatory obligations and lax commitment to compliance, said the complaint, which added the “high turnover in the firm’s chief compliance officer position” also demonstrates that Lime Trading lacked preparedness and capability to comply completely with regulatory requirements as an FCM and reveals inadequate supervision of the firm’s overall operations.

As of August 31, 2023, Lime Trading reported approximately $8.3 million in excess net capital, $46,000 in excess segregated funds, and $40,000 in excess secured funds.

Regulatory issues started when, in 2021, Lime Trading filed segregation and secured statement computations three days and one day late, respectively. The said it missed the deadline due to a meeting and the late November filing due to the submitter being ill.

In 2022, its daily segregation statement was also filed after the deadline.  Lime Trading attributed the late filing to a third-party consultant.

In 2023, Lime filed a month-end financial statement one business day late. Shortly thereafter, Lime Trading submitted another late financial report, this time four days after deadline.

To deter late financial filings, NFA imposes a fee of $1,000 for each business day a financial filing is late. To date, Lime Trading has paid $5,000 for its late financial filings, described above. Despite paying late fees and repeat warnings from NFA and the CFTC, Lime Trading’s failure to file timely financial reports continued, which led the NFA to charge Lime with these violations, which ended up in a $100,000 settlement.

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