WASHINGTON, D.C. – Capital Market Services, LLC (CMS), a New York-based Futures Commission Merchant (FCM) and former Retail Foreign Exchange Dealer (RFED), has been penalized by the U.S. Commodity Futures Trading Commission (CFTC) for failing to meet minimum financial requirements. The CFTC issued an order on April 7, 2014, simultaneously filing and settling charges against the firm.
The order details that between March 2009 and October 2012, CMS repeatedly failed to maintain the required adjusted net capital (ANC). As an FCM, CMS was required to maintain an ANC of at least $1,000,000, or a higher amount dictated by its registered futures association. When operating as a Forex Dealer Member (FDM) with the National Futures Association (NFA) between January 2009 and mid-December 2010, the required ANC ranged from $15,000,000 to approximately $21,000,000. As an RFED, the ANC requirement was approximately $21,000,000.
The CFTC found that CMS failed to meet these requirements for at least 17 months during the period in question, with its ANC falling short by over $19 million at one point. CMS has been registered with the CFTC as an FCM since January 2002 and operated as an RFED from September 2009 to mid-December 2010, also functioning as an FDM from approximately January 2009 to mid-December 2010.
As a result of the violations, CMS will pay a $275,000 civil monetary penalty and is ordered to cease and desist from further violations of the Commodity Exchange Act and CFTC Regulations. The CFTC acknowledged CMS’s cooperation and the corrective actions taken after the deficiencies were identified.
The CFTC’s investigation was led by Kevin S. Webb, Brandon Tasco, Michael Solinsky, Charles D. Marvine, Paul G. Hayeck, and Richard Wagner of the Division of Enforcement, with assistance from Annette Vitale of the Division of Swap Dealer and Intermediary Oversight. The NFA also provided assistance in the matter.
Source: CFTC.gov
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