Deerfield Beach, FL – The U.S. Commodity Futures Trading Commission (CFTC) settled charges against LMC Asset Management, Inc. for operating as an unregistered Commodity Trading Advisor (CTA), the agency announced July 18, 2012. The firm engaged in discretionary trading of retail foreign currency (forex) transactions without proper registration.
The CFTC order detailed that between October 18, 2010, and October 21, 2011, LMC exercised discretionary authority over the forex accounts of 36 customers who did not qualify as eligible contract participants (ECPs). These customers deposited a total of approximately $455,155.22 into the accounts.
The charges stem from LMC’s failure to register as a CTA after new regulations took effect on October 18, 2010, as mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the 2008 Farm Bill. These regulations require CTAs to register before managing discretionary forex accounts for non-ECP customers.
As a result of the violations, LMC has been ordered to pay a $140,000 civil monetary penalty and to cease and desist from further violations of the Commodity Exchange Act and CFTC regulations. The order also permanently prohibits LMC from engaging in commodity-related transactions, soliciting funds for commodity futures or forex contracts, and applying for registration with the CFTC until the penalty is fully paid.
The CFTC acknowledged the assistance provided by the U.K. Financial Services Authority during the investigation. The case was led by CFTC staff members Sophia Siddiqui, Timothy J. Mulreany, Michael Amakor, Elizabeth Padgett, Paul Hayeck, and Joan Manley.
Source: CFTC.gov
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