CFTC Hits Rosenthal Collins For Over $1.3 Million


The CFTC releases details of actions it has taken against a variety of miscreants in the retail forex industry on a fairly regular basis.  They have just released another one, which caught my eye because the sums of money involved are somewhat larger than usual, and also somewhat unusually:

The U.S. Commodity Futures Trading Commission (CFTC) today announced the filing and simultaneous settlement of charges against Rosenthal Collins Group, L.L.C. (RCG).

Notice that the charges against Rosenthal Collins Group were filed and settled "simultaneously", although presumably negotiations have been going on in private for quite some time. RCG have had a variety of adventures into retail forex, the most recent coming to an end when MG Forex shut up shop following the confirmation of the final CFTC rules post Dodd-Frank and transferred clients to GAIN Capital, who are much better known by their brand.

However this particular action relates to "supervision violations" in RCG's exchange traded futures and options business.  As the full CFTC order about the case reveals:

At various points from July 2005 through May 2008, RCG failed to supervise diligently its employees' handling of accounts held at RCG in the name of George D. Hudgins.

During the period in question, RCG and its guaranteed introducing broker (GIB), together received hundreds of thousands of dollars in commissions from Hudgin's trading.

By October 18th thanks to the new CFTC regulations there will be many more guaranteed introducing brokers in US retail forex, but that doesn't necessarily mean your money will be safe. For example, in this case:

The CFTC order, entered on September 30, 2010, requires RCG to pay a $780,000 civil monetary penalty and orders disgorgement of $618,526, the amount of commissions that RCG and its guaranteed introducing broker earned from Hudgins’ trading. The court-appointed receiver in the CFTC’s Hudgins litigation will distribute the disgorgement funds to persons defrauded by Hudgins.

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Comments on CFTC Hits Rosenthal Collins For Over $1.3 Million Leave a Comment

October 5, 2010

none @ 10:14 am #

has nothing to do with forex

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