The
National Futures Association (NFA) has fined Marex Spectron International
Limited $350,000 for letting unregistered staff handle orders from U.S.
customers. It is the second time in four years the London broker has settled
the same type of case.
The NFA’s
Business Conduct Committee issued the decision on June 30. Marex Spectron
neither admitted nor denied the findings, which cover a breach of an NFA
registration rule and a related supervision requirement.
A Second Case Over the
Same Conduct
The penalty
runs 40% higher than the $250,000 the firm paid in 2022 after an earlier NFA examination.
Both cases centered on the same London energy division.
In the
current matter, examiners found 14 Marex Spectron brokers soliciting or
accepting orders from U.S. customers without registering with the Commodity
Futures Trading Commission as associated persons. NFA rules require that status
for anyone dealing with American clients.
Thirteen of
the 14 worked in London and one in Dubai, according to the complaint. They
handled about 75 trades for 20 U.S. customers between February and April 2024,
and made up roughly 40% of the brokers on the London energy desk.
Why Registration Applies
A CFTC
exemption lets brokers based outside the United States skip registration if
they deal only with non-U.S. customers. NFA said the 14 individuals did not
qualify, because their clients were companies formed or headquartered in the
United States.
One example
in the complaint describes a London broker arranging a crude oil
contract-for-difference trade in March 2024 for a client that firm records
identified as an Illinois company based in Chicago.
Repeat Findings Draw
Sharper Language
The firm’s
first NFA case, filed in 2022, followed a 2020 examination and named 18 brokers
in the same division. That case also ended in a settlement, alongside separate
NFA actions that year against Coquest and Interactive Brokers.
NFA said
the repeat findings were “especially troubling” given the earlier
complaint, and that the firm had not put effective controls in place to stop
the conduct from recurring.
Regulators
pointed to one broker, identified only as Employee 1, who was flagged back in
the 2020 examination. The firm had said a registered colleague would take over
his U.S. business. It later acknowledged he arranged more than 50 trades for
U.S. customers between June 2021 and June 2024 while still unregistered.
This article was written by Damian Chmiel at www.financemagnates.com.
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