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May 07, 2015 4:47 AM ET

Internet Software and Services

Company Overview of FXDirectDealer, LLC

Company Overview

FXDirectDealer, LLC develops and markets online foreign exchange trading systems to financial institutions and advisors. The company provides Internet based real-time margin monitoring capability solution. It also offers e-commerce product for trading margined foreign currency at interbank market rates. It caters to retail traders and investors, corporations, money managers, and hedge funds. The company has a strategic alliance with MoneyTec LLC. It was founded in 2002 and is based in New York, New York. FXDirectDealer, LLC operates as a subsidiary of Compagnie Financiere Tradition.

7 World Trade Center

250 Greenwich Street

32nd Floor

New York, NY 10007

United States

Founded in 2002

Phone:

212-791-3950

Fax:

212-937-3845

Key Executives for FXDirectDealer, LLC

Chief Executive Officer and Vice Chairman
Chief Operating Officer
Senior Vice President
Age: 73
Chief Technology Officer
Chief Legal Officer
Compensation as of Fiscal Year 2014.

FXDirectDealer, LLC Key Developments

The U.S. Commodity Futures Trading Commission Orders to Pay $600,000 Civil Monetary Penalty to FXDirectDealer, LLC

The U.S. Commodity Futures Trading Commission issued an order filing and simultaneously settling charges against FXDirectDealer, LLC for failing to meet the minimum financial requirements for RFEDs and FCMs, failing to supervise its employees, and failing to comply with a prior CFTC administrative order dated September 30, 2013 (Prior Order). FXDD has been registered with the CFTC as an FCM since December 10, 2009 and as an RFED since September 2, 2010. Under CFTC Regulations, RFEDs and FCMs that offer or engage in retail foreign exchange (forex) transactions must at all times maintain adjusted net capital (ANC) of $20 million, or more in certain circumstances. In the Prior Order, the CFTC found that FXDD failed to maintain its required ANC during at least 18 separate months between November 2010 and December 2012 and ordered FXDD to, among other things, cease and desist from further violations of its ANC requirements. Each of these violations, the Order finds, was a result of FXDD’s inadequate supervisory system and its failure to diligently supervise employees, officers, and agents with respect to the handling and monitoring of FXDD’s compliance with its minimum financial requirements. The Order imposes a $600,000 civil monetary penalty against FXDD for its violations, as well as a cease and desist order and a three-year registration ban as an FCM or RFED.

Commodity Futures Trading Commission Orders FXDirectDealer to Pay $2.74 Million for Supervision Failures Relating to Trading Platform

The U.S. Commodity Futures Trading Commission (CFTC) issued an Order filing and simultaneously settling charges that, from at least December 10, 2009, until June 2011, FXDirectDealer, LLC (FXDD), violated its supervision obligations by employing a trading system that gave FXDD pricing advantages over and harmed thousands of its retail customers. The CFTC Order requires FXDD to make full restitution of $1,828,261 to FXDD s current and former customers that were harmed by its violation and imposes a $914,131 civil monetary penalty against FXDD. According to the CFTC Order, FXDD solicits customers to open trading accounts and to buy or sell foreign currency (forex) with FXDD taking the other side of the transaction. FXDD streams forex price quotes for particular currency pairs to its customers through its electronic trading platforms. The price quotes offered by FXDD measured in ‘pips’ often change, or ‘slip’ between the time the customer clicks on a price showing on the computer and the time FXDD fills the customer’s order. If the price slips, FXDD’s system employs slippage parameters that determine whether FXDD fills or rejects a customer order at the original price clicked by the customer, the Order finds. According to the CFTC Order, FXDD used asymmetrical slippage parameters on its principal trading platform, meaning that the system favored FXDD over its customers in slippage situations. Based on these parameters, FXDD rejected a customer’s order when the price slipped more than 2 pips in the customer’s favor (and instead re-quoted the customer the new, less favorable price), but filled a customer’s order at the original price if the price slipped in FXDD’s favor by more than 2 pips. As a result, FXDD benefited from slippage of more than 2 pips in its favor between order placement and order execution, but did not allow its customers to benefit from similar price changes in their favor. The CFTC Order further finds that had FXDD employed an adequate supervisory system and diligently supervised its personnel, FXDD would have discovered these problems with the integrity of trades on the platform and would have had the opportunity to correct them before more than 24,900 customer accounts were deprived of $1,828,261.

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