Gain Capital fined $700K by NFA for compliance violations

The National Futures Association (NFA) has announced issuing a $700,000 fine on Gain Capital Group LLC, operator of retail forex brand

Self-regulatory organization overseeing the derivatives markets in the US stated that the monetary penalty was issued for multiple compliance violations by

The NFA alleges that Gain Capital improperly adjusted customer accounts following a system malfunction on the trading platform, which took place from about 2:55 pm on 31 March 2021 to about 1:00 am on 1 April 2021. During this time, customers on the platform could execute stop and limit orders in 14 currency pairs at prices, which did not correspond to the current published price.

NFA Fine

Gain Capital stopped the system malfunction but before it had done so it had incurred a loss of about $3 million. The company also made negative adjustment of the accounts of 17 customers by about $2.84 million and the positive adjustment of 33 customer accounts by about $35,000. These actions were approved by Gain Capital’s CEO, Alexander Bobinski.

The decision for the penalty was made by NFA’s Business Conduct Committee (BCC). It is based on a complaint issued by the BCC and a settlement offer by Gain and Alexander Bobinski, without admitting or denying the allegations.

In the official complaint, the NFA accused GAIN of improperly adjusting customer accounts and improper treatment of customers affected by the system malfunction and account adjustments. Furthermore, the company was also accused of submitting inaccurate and incomplete information to NFA. The self-regulatory organization held both, Gain Capital and Bobinski, for supervisory failures.

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