NFA to increase maximum monetary penalty for rule violations

Maria Nikolova

The maximum monetary penalty will increase to $500,000 per rule violation, effective August 31, 2020.

The United States National Futures Association (NFA) today published a notice regarding amendments to its rules concerning monetary penalties for firms that break the rules.

NFA Compliance Rule 3-14 outlines the types of penalties that an NFA disciplinary panel may impose at the conclusion of an NFA disciplinary proceeding. NFA recently amended this rule to increase the maximum monetary penalty to $500,000 per rule violation. The previous maximum size was $250,000 per violation.

This increase is intended to further deter violations of NFA requirements and provide NFA’s disciplinary panels with the flexibility needed in assessing penalties. These amendments will become effective on August 31, 2020.

Back in May, NFA explained that it has not encountered any issues with the current maximum penalty fine amount. However, NFA has not increased this amount since 1990, and NFA believes that the increase will help deter violations of NFA requirements and provide NFA’s disciplinary panels with the flexibility they need in determining penalties.

After the changes, the rules (Part 3 – Compliance Procedures; RULE 3-14. PENALTIES) will read:

“The Business Conduct Committee, BCC Panel or Hearing Panel, or the Appeals Committee on appeal or review, may at the conclusion of the disciplinary proceeding impose one or more of the following penalties:

(ii) Bar or suspension for a specified period from association with a Member;

(iii) Censure or reprimand;

(iv) A monetary fine, not to exceed $500,000 per violation;

(v) Order to cease and desist; and

(vi) Any other fitting penalty or remedial action not inconsistent with this rule.”

Read this next

Digital Assets

OneCoin founder Ruja Ignatova is selling penthouse in UK

OneCoin founder Ruja Ignatova, who steered one of the world’s biggest cryptocurrency frauds, is back into the spotlight more than five years after vanishing from the public eye.

Digital Assets

Bitpay taps MoonPay to offer access to +60 cryptocurrencies

Crypto payment service provider Bitpay said it’s partnering with exchange and web3 infrastructure provider MoonPay to provide its users with easier access to buy cryptocurrency instantly.

Digital Assets

New York investigates Gemini over FDIC insurance claims

New York regulators are investigating Gemini over “false and misleading” claims the Winklevoss-owned exchange had made about whether client funds are insured by the government.

Digital Assets

Binance launches Mastercard-backed crypto card in Brazil

In partnership with Mastercard, crypto giant Binance is launching its pre-paid card offering cryptocurrency “rewards” on customers’ purchases.

Digital Assets

Circle publishes a breakdown of USDC reserves for December

Boston-based stablecoin issuer Circle has revealed a breakdown of its reserves for December 2022, as well as a complete list of USDC reserve custodians.

Retail FX

Monex reports lower revenues as crypto downturn bites

Monex Group has reported its Q3 2022 financial metrics, which saw a reversal in terms of its revenues as TradeStation was grappling with a crypto market crash that has tanked the profitability of its crypto business.

Inside View

Broadridge report finds 27% of firms’ overall IT budget goes to digital transformation

“A new chapter in digital transformation is emerging. In our work with clients across the financial services industry we see leading firms are already reaping the benefits from digitalization and the use of technologies such as AI and blockchain/DLT, as they adapt to economic headwinds and new competitive dynamics”

Executive Moves

Ripple announces Monica Long as President

“I’m incredibly honored to take on the role of President at Ripple as we expand deeper into crypto-enabled services like liquidity, settlement and custody.”

Executive Moves

Arabesque AI appoints Carolina Minio Paluello as CEO

“Arabesque AI is uniquely positioned to service the asset management industry’s need to meet the growing market demand for hyper customised portfolios.”

<