Newedge USA Fined $700,000 by CFTC for Trading Record Errors
Newedge USA LLC, the broker with the most U.S. segregated customer funds, will pay $700,000 to resolve regulatory claims that the firm submitted flawed trader reports and violated an earlier order to improve accuracy.
Newedge turned in large-trader reports with eight types of errors from March through July of last year including overstatements and understatements of positions and open interest, the Commodity Futures Trading Commission said in an order released in Washington today. The regulator also found that the brokerage, a unit of Paris-based Newedge Group SA, failed to comply with a Feb. 7 order to improve its reporting.
“Today’s action should send a message to the industry that the commission expects its reporting rules to be strictly adhered to, and that the commission will sanction those who fail to adhere to prior commission orders,” CFTC Enforcement Director David Meister said in a statement. Newedge’s reporting “has greatly improved” since July, the CFTC said.
The company, which didn’t admit or deny the allegations, regrets that “certain reports required corrections” during the firm’s re-engineering efforts, Kevin Russell, a spokesman for Newedge, said in an e-mail statement.
“Newedge has elected to settle with the CFTC because of these lapses,” Russell said.
Newedge ranked first among futures brokers with $20.8 billion in U.S. customers’ segregated funds on Oct. 31, according to CFTC data.
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