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Screenshot of a breaking news alert e-mail from Q2 2017
Financial markets regulators around the world are continuing to take a dim view of companies which promise extremely high potential returns for their FX schemes with no performance records to validate their claims.
The National Futures Association (NFA) announced yesterday that it has taken an emergency enforcement action against McElhannon Group, Inc., an NFA Member commodity trading advisor (CTA) located in Burnet, Texas, and Philip Mack Worley, a principal and associated person (AP) of McElhannon Group Inc.
The NFA has taken the Member Responsibility Action (MRA) and Associate Responsibility Action (ARA) to protect customers of McElhannon Group and Mr. Worley since McElhannon Group and Mr. Worley have failed to cooperate with NFA throughout its attempted examination of the firm.
Specifically, the NFA received a complaint forwarded by the Texas State Securities Board that suggests Mr. Worley and McElhannon Group were using misleading and deceptive promotional materials. McElhannon Group’s promotional material claimed a rate of return of 457 percent over a 13-year period for its forex managed account program.
This particular circumstances demonstrates the effectiveness of the US regulatory authorities who stepped in and conducted an inspection with regard to the fanciful claims of McElhannon Group before any customers were subjected to liability, unlike in other jurisdictions whereby the regulator often reacts to such schemes following losses sustained by investors.
Because Mr. Worley and McElhannon Group have failed to cooperate with NFA throughout its attempted investigation of the firm, NFA is unable to determine whether the firm is in compliance with NFA requirements. Specifically, the NFA has serious doubts regarding the authenticity of the returns featured in McElhannon’s promotional material.
Effective immediately, McElhannon Group and Mr. Worley are suspended from NFA membership and associate membership.They also are prohibited from disbursing or transferring any customer funds over which either McElhannon Group, Mr. Worley or any person acting on behalf of McElhannon Group exercises control, without prior approval from NFA.
The MRA/ARA will remain in effect until such time as Worley and McElhannon Group have demonstrated to the satisfaction of NFA that they are in complete compliance with all NFA Requirements.
Worley and McElhannon may request a hearing before NFA’s Hearing Committee.
To view the complete case document from the NFA, click here.