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Screenshot of a breaking news alert e-mail from Q2 2017
The CFTC has announced a settlement with social trading giant Zulutrade, whereby Zulutrade will pay a fine of $150,000 and repay commissions earned of $80,000.
The settlement involve charges that from 2010 to 2013 Zulutrade failed to follow procedures for screening clients from the U.S. Department of the Treasury’s Office of Foreign Assets Control’s (OFAC) targeted countries. The CFTC claims that Zulutrade opened approximately 400 accounts for traders from OFAC targeted countries – primarily Iran, Sudan, and Syria.
OFAC administers and enforces economic and trade sanctions against targeted foreign countries based on U.S. foreign policy and national security goals. Zulutrade had a procedure to screen for potential clients from OFAC targeted countries. That procedure provided that Zulutrade could delegate implementation of OFAC screening to third party service providers or agents, provided that Zulutrade had a written agreement with the service provider outlining the third party’s responsibilities, and that Zulutrade would actively monitor the delegation to assure that the procedures are being conducted in an effective manner.
All of the 400 accounts opened for traders from the targeted countries listed above were from service providers with which Zulutrade did not have written agreements.
Based in Greece, Zulutrade was founded in 2007 by Leon Yohai and was a pioneer in the now-popular sphere of social trading and auto trading.
To see the complete CFTC press release click here.