New York, NY – The U.S. Commodity Futures Trading Commission (CFTC) has levied a $7 million penalty against Forex Capital Markets, LLC (FXCM), its parent company FXCM Holdings, LLC, and two of its founding partners, Dror “Drew” Niv and William Ahdout. The charges stem from a years-long scheme to mislead retail foreign exchange (forex) customers.
According to the CFTC order, between September 2009 and 2014, FXCM concealed its relationship with a key market maker while falsely advertising its “No Dealing Desk” platform as conflict-free. The company and its leaders, Niv and Ahdout, also misrepresented information to the National Futures Association (NFA) regarding this relationship.
The CFTC found that FXCM, under the direction of Niv and Ahdout, actively misled customers into believing that the company had no financial stake in their trades. Marketing materials claimed FXCM simply acted as a credit intermediary and that customer profits or losses did not affect the company’s bottom line. The risk, they claimed, was borne by independent market makers.
However, the investigation revealed that FXCM held an undisclosed financial interest in the market maker that consistently handled the majority of its trading volume – effectively taking the opposite side of customer trades. This created a clear conflict of interest that was never disclosed to investors.
As part of the settlement, FXCM, Niv, and Ahdout are jointly and severally responsible for the $7 million civil monetary penalty. Critically, all three parties have agreed to permanently withdraw from CFTC registration and are barred from seeking future registration or acting in any capacity requiring such registration with the CFTC.
“Full and truthful disclosure to customers and honest discourse with self-regulatory organizations such as NFA are vital to the integrity and oversight of our markets,” stated Gretchen L. Lowe, Principal Deputy Director and Chief Counsel of the CFTC’s Division of Enforcement. “Today’s actions demonstrates that the CFTC is committed to protecting customers from harm in the markets it regulates.”
FXCM is registered with the CFTC as a Futures Commission Merchant and Retail Foreign Exchange Dealer. Niv and Ahdout were both CFTC registrants during the period in question.
Source: CFTC.gov
Related Federal Cases
- Wall Street Firms, Financial Malfeasance, New York NY, 2023 · Washington
- Christopher Ferguson, PPE Scam, New York NY, 2023 · New Mexico
- Christopher Ferguson, Scheme to Inflate Order Numbers, New York NY,… · Washington
- Todd Faustin, Workers’ Compensation Fraud, New York NY, 2023 · New York
- Kenneth Thom Pleads Guilty to Investment Scam, New York NY, 2026 · New York
MORE FEDERAL CRIME NEWS
US NewsUS NewsUS NewsUS News