Violations occurred between 2009-2012, CMS was undercapitalized by more than $13 million at one point.
The CFTC has fined Capital Market Services LLC, parent of CMS Forex, a total of $275,000. The CFTC has found that CMS did not maintain its required capital levels during at least 17 separate months between March 2009 and October 2012, with month-end computations showing that CMS was undercapitalized by more than $13 million at one point.
The CFTC did note CMS’s cooperation and corrective action it undertook after its deficiencies were discovered.
CMS used to be a full-fledged Forex Dealer Member (FDM), allowing it to hold client capital in the US and engage in direct trades with clients. That status required capital varying between $15-21 million. After it ceased being an FDM in late 2010, CMS continued to be registered as a Futures Commission Merchant (FCM), with a much lower required capital of about $1 million.
In its FCM status, CMS acts as an Introducing Broker of Gain Capital.
To see the complete CFTC press release click here.