The
National Futures Association (NFA) has imposed a $400,000 fine on X-Change Financial
Access (XFA), part of Marex, and suspended one of its executives from
supervisory duties, following an investigation that revealed alleged compliance
violations at the Chicago-based introducing broker.
Chicago Broker X-Change
Financial Access Fined $400,000 by NFA
Timothy
Francis Hendricks, an associated person and principal at XFA, will be barred
from supervisory roles for 90 days and share liability for $100,000 of the
total fine, according to the NFA’s decision issued
Wednesday.
The
regulatory action stems from alleged multiple violations, including the firm’s
failure to maintain proper transaction records and pre-trade communications.
The NFA also found that XFA allowed unregistered individuals to operate as
associated persons without proper registration or NFA association status.
“The
firm failed to keep full, complete, and systematic records of all
transactions,” the NFA stated in its decision, highlighting broader
supervision inadequacies under Hendricks’ watch.
The
settlement, reached without admission or denial of the allegations, requires
XFA and Hendricks to implement remedial measures outlined in a separate
agreement with the regulator. These undertakings specifically address the
violations and relate to Hendricks’ temporary supervision prohibition.
NFA sanctions Chicago-based introducing broker X-Change Financial Access LLC and two employees https://t.co/isrMtAbn4k pic.twitter.com/vialSOSpOA
— NFA News (@NFA_News) November 20, 2024
It is worth
noting that this is not the first settlement and fine paid by XFA to the NFA.
In 2018, the
regulator imposed a $100,000 penalty on the company for executing
transactions on behalf of an individual who had been banned from trading.
The case
originated from a complaint filed by the NFA’s Business Conduct Committee in
April 2024, which led to a formal investigation of the firm’s practices and
supervisory controls.
The
sanctions also render Hendricks ineligible to serve on disciplinary committees,
arbitration panels, or governing boards of any self-regulatory organization for
at least three years, as per CFTC regulations.
Part of Marex
Global
commodities broker Marex, headquartered in London, acquired XFA four years ago.
Founded in 2001, XFA operates out of Chicago, with additional offices in New
York and San Francisco. The company offers a broad range of services, including
market information, strategic data, futures execution, and direct market
access.
XFA serves
a diverse customer base across Europe, North America, and Asia, including
global financial services firms, some of the world’s largest hedge funds,
institutional investors, commodity trading advisors (CTAs), and market makers .
XFA is the latest Chicago-based broker to face a financial penalty from the NFA this week. As
reported yesterday (Wednesday) by Finance Magnates, NinjaTrader Clearing
and its president, Michael Cavanaugh, were also penalized for alleged
significant failures in anti-money laundering (AML) controls and suspicious
activity monitoring at the Chicago-based futures commission merchant.
The
National Futures Association (NFA) has imposed a $400,000 fine on X-Change Financial
Access (XFA), part of Marex, and suspended one of its executives from
supervisory duties, following an investigation that revealed alleged compliance
violations at the Chicago-based introducing broker.
Chicago Broker X-Change
Financial Access Fined $400,000 by NFA
Timothy
Francis Hendricks, an associated person and principal at XFA, will be barred
from supervisory roles for 90 days and share liability for $100,000 of the
total fine, according to the NFA’s decision issued
Wednesday.
The
regulatory action stems from alleged multiple violations, including the firm’s
failure to maintain proper transaction records and pre-trade communications.
The NFA also found that XFA allowed unregistered individuals to operate as
associated persons without proper registration or NFA association status.
“The
firm failed to keep full, complete, and systematic records of all
transactions,” the NFA stated in its decision, highlighting broader
supervision inadequacies under Hendricks’ watch.
The
settlement, reached without admission or denial of the allegations, requires
XFA and Hendricks to implement remedial measures outlined in a separate
agreement with the regulator. These undertakings specifically address the
violations and relate to Hendricks’ temporary supervision prohibition.
NFA sanctions Chicago-based introducing broker X-Change Financial Access LLC and two employees https://t.co/isrMtAbn4k pic.twitter.com/vialSOSpOA
— NFA News (@NFA_News) November 20, 2024
It is worth
noting that this is not the first settlement and fine paid by XFA to the NFA.
In 2018, the
regulator imposed a $100,000 penalty on the company for executing
transactions on behalf of an individual who had been banned from trading.
The case
originated from a complaint filed by the NFA’s Business Conduct Committee in
April 2024, which led to a formal investigation of the firm’s practices and
supervisory controls.
The
sanctions also render Hendricks ineligible to serve on disciplinary committees,
arbitration panels, or governing boards of any self-regulatory organization for
at least three years, as per CFTC regulations.
Part of Marex
Global
commodities broker Marex, headquartered in London, acquired XFA four years ago.
Founded in 2001, XFA operates out of Chicago, with additional offices in New
York and San Francisco. The company offers a broad range of services, including
market information, strategic data, futures execution, and direct market
access.
XFA serves
a diverse customer base across Europe, North America, and Asia, including
global financial services firms, some of the world’s largest hedge funds,
institutional investors, commodity trading advisors (CTAs), and market makers .
XFA is the latest Chicago-based broker to face a financial penalty from the NFA this week. As
reported yesterday (Wednesday) by Finance Magnates, NinjaTrader Clearing
and its president, Michael Cavanaugh, were also penalized for alleged
significant failures in anti-money laundering (AML) controls and suspicious
activity monitoring at the Chicago-based futures commission merchant.
This post is originally published on FINANCEMAGNATES.
