The US Commodity Futures Trading Commission (CFTC) filed and settled charges against Ikon Global Markets. The company has stopped operating in the US after increased regulatory scrutiny on brokers with the implementation of Dodd Frank wreaked havoc amongst forex dealers.
Ikon Global Markets is said to have failed to keep adequate records for several thousand gold trades. The Exchange for Physical (EFP) trades were entered into by the brokerage and were sent to the NASDAQ OMX Futures Exchange, however the company failed to produce records of the transactions.
The civil monetary penalty that settles the charges for Ikon Global Markets mandates the company to pay $200,000. The firm is also required to cease and desist from further violations of Regulations and to withdraw and never reapply for CFTC registration.
The company has already been complying with the latter part of the settlement due to its early exit from the US market several years ago.
According to the order filed by the CFTC, between February 9th, 2012, through September 12th of the same year a proprietary account of Ikon entered into thousands of gold transactions with one of its customers.
The trades were reported to the NASDAQ OMX Futures Exchange. The transactions involved a privately negotiated and simultaneous exchange of a position in spot gold.
The regulator has issued a subpoena to the brokerage to produce records of the trade in 2015. The brokerage provided daily records reflecting the end of day positions in futures contracts, but failed to produce the EFP transactions.
EFP transactions are enabling traders to avoid exposure to intraday market execution. The transaction is converting between futures and either ETFs or baskets of the underlying asset. traders can suit their positions to meet leverage, capital, tax and liquidity requirements.
In 2016, the CFTC issued a second subpoena, identifying seven specific EFP transactions. The company produced some records, however failed to provide certain documents. In February this year, the CFTC asked the company to produce the records once more with a final date of March 17th 2017, the brokerage failed to provide the documents which resulted in the action taken by the US regulator.
Finance Magnates has reached out to the company for a comment on the matter, however at the time of publication no official response has been received.
Yesterday Finance Magnates reported about Ikon Global Markets being intertwined in a legal case filed by a group of investors in a Greek Ponzi scheme. The perpetrator of the scheme has not been affiliated with the company, with the plaintiffs seeking damages against the brokerage instead. Similar action in UK courts failed.
Commenting to Finance Magnates, a company representative stated that the changes are false and the firm will seek to vacate the court case.