National Futures Association (NFA) has ordered McVean Trading & Investments LLC, Charles Dow McVean Sr. and Llewellyn Hall to pay a $625,000 fine.
McVean Trading is an NFA Member futures commission merchant located in Memphis, Tennessee.
Mssrs McVean Sr. and Hall are both principals and associated persons of the firm. The Decision, issued by NFA’s Business Conduct Committee (BCC), is based on a Complaint, and a settlement offer submitted by McVean Trading, McVean Sr. and Hall.
The Complaint alleges that McVean Trading failed to maintain an audit trail of bunched customer order allocations that was objective and specific enough to permit independent verification of the fairness of the allocations and sufficient to demonstrate that the firm used a defined methodology.
The Complaint further alleges that McVean Trading failed to enact required procedures regarding allocations from bunched customer orders.
Post-execution allocation is a procedure during which an account manager is permitted to bunch customer orders together for execution, and to allocate them to individual accounts by no later than the end of the day. Bunching of orders involves an account manager placing trades for two or more customers at the same time in the same order. After the bunched orders are executed, an account manager must assign the trades to customers’ accounts, a process known as allocation.
The Complaint also charged McVean Sr. and Hall with failure to diligently supervise McVean Trading’s operations. Specifically, the Complaint alleges deficiencies relating to the lack of enforcement of a firm policy prohibiting associated persons from holding accounts at other futures commission merchants and a failure to list branch offices in a timely manner.
McVean Trading, McVean Sr. and Hall neither admitted nor denied the allegations.
Additionally, the NFA has ordered Memphis, Tennessee. firm K&M Trading, LLC and its principals, William Kaelin and John Morrissey, to pay a $105,000 fine
K&M is an NFA Member commodity trading advisor located in Memphis, Tennessee, and Mssrs Kaelin and Morrissey are the only principals and associated persons of the firm.
The Decision, issued by NFA’s Business Conduct Committee (BCC), is based on a Complaint, and a settlement offer submitted by K&M, Kaelin and Morrissey.
The Complaint alleges that K&M failed to maintain an audit trail of bunched customer order allocations that was objective and specific enough to permit independent verification of the fairness of the allocations and sufficient to demonstrate that the firm used a defined methodology.
The Complaint further alleges that K&M failed to enact required procedures regarding allocations from bunched customer orders. The Complaint also charged Kaelin and Morrissey with failure to diligently supervise K&M’s operations.
Post-execution allocation is a procedure during which an account manager is permitted to bunch customer orders together for execution, and to allocate them to individual accounts by no later than the end of the day. Bunching of orders involves an account manager placing trades for two or more customers at the same time in the same order. After the bunched orders are executed, an account manager must assign the trades to customers’ accounts, a process known as allocation.
K&M, Kaelin and Morrissey neither admitted nor denied the allegations.