WASHINGTON, D.C. – MB Trading Futures Inc., a California-based financial firm, has been penalized by the U.S. Commodity Futures Trading Commission (CFTC) for failing to meet minimum financial requirements, according to an order issued on May 14, 2013. The firm, registered as both a Retail Foreign Exchange Dealer (RFED) and a Futures Commission Merchant (FCM), was found to have violated regulations designed to protect investors in the retail foreign currency (forex) market.
The CFTC alleges that between October 18, 2010, and March 1, 2012, MB Trading improperly included certain funds in its adjusted net capital and asset calculations. These calculations are crucial for ensuring the firm can meet its obligations to customers. Specifically, the CFTC found that MB Trading failed to maintain the required adjusted net capital of $20 million for 456 days and failed to hold sufficient assets to cover its retail forex obligations for 501 days during that same period.
According to the CFTC order, the improper inclusion of funds artificially inflated MB Trading’s financial standing. Had the funds been correctly accounted for, the firm would not have met the required financial thresholds. The violations stem from new rules adopted by the CFTC in October 2010, aimed at bolstering investor protection in the forex market.
As a result of these findings, the CFTC has imposed a $200,000 civil monetary penalty on MB Trading and issued a cease and desist order, prohibiting the firm from engaging in similar violations in the future. The CFTC noted that MB Trading’s cooperation and subsequent corrective actions were considered when determining the penalty. The case was investigated by CFTC staff members Stephanie Reinhart, Melissa Glasbrenner, William Janulis, Scott Williamson, Rosemary Hollinger, and Richard Wagner, with assistance from Tom Bloom, Kurt Harms, Justin Beebe, and Lauren Fulks of the CFTC’s Division of Swap Dealer and Intermediary Oversight.
The National Futures Association provided assistance in the investigation.
Source: CFTC.gov
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