Zulutrade’s fine by NFA is a storm in a teacup
Social trading and its relationship with regulators is safe. While many mainstream regulatory authorities have been examining the possibilities of regulating social trading platforms as financial advisers, not much in the way of progress has yet been demonstrated. The National Futures Association (NFA), one of the world’s most stringent and well organized regulatory authorities, has […]
Social trading and its relationship with regulators is safe.
While many mainstream regulatory authorities have been examining the possibilities of regulating social trading platforms as financial advisers, not much in the way of progress has yet been demonstrated.
The National Futures Association (NFA), one of the world’s most stringent and well organized regulatory authorities, has not concerned itself unduly with such platforms, as they are not popular in North America, however the NFA did issue a complaint recently against Zulutrade and its CEO Leon Yohai, largely around capital adequacy requirements as an introducing broker.
The initial complaint was made in April this year, and there was speculation that the NFA may issue a heavy penalty as capitalization for regulatory purposes is a major point for the regulator.
On Friday, the NFA made its decision, which pretty much amounted to nothing.
On April 28, the NFA’s complaint charged Zulu with failing to maintain minimum net capital, to implement the firm’s AML program and to adequately supervise its employees, agents and operations. The Complaint charged Giochais with failing to adequately supervise the firm’s employees, agents and operations.
On September 30, 2016, the BCC issued a Decision in which it accepted Zulutrade and Giohais’s settlement offer and fined them $30,000, payable upon any future application for NFA membership.
Business as usual….
