Commodity Futures Trading Commission (CFTC) has fined
NinjaTrader Clearing, LLC (NTC) $983,425 for failing to adequately supervise
employee handling of accounts linked to a fraudulent case.
Fraudulent Account Handling
According to the CFTC, the Illinois-based futures
commission merchant failed to exercise due diligence in overseeing employee
actions in managing suspected fraudulent accounts. A statutory restraining
order (SRO) required NinjaTrader to freeze or restrict these accounts
immediately, yet the firm reportedly did not act promptly.
The watchdog mentioned that this failure resulted in open positions losing over $200,000 in value, compounding the financial damage from the fraudulent schemes. Central to the matter, the CFTC mentioned that the
company did not implement sufficient policies and procedures for handling such
emergencies.
From late 2020 onwards, NinjaTrader reportedly failed
to develop proper protocols for dealing with court orders affecting the flagged
accounts. Despite receiving the SRO in January 2022, the regulator claims the
firm allowed the suspected accounts to remain active.
Penalties and Restitution
As part of the settlement, the CFTC levied a civil
monetary penalty of $750,000 on NTC. In addition, the firm must pay $233,425 in
restitution, which will be distributed to fraud victims.
Expect ongoing updates as this story evolves.
Commodity Futures Trading Commission (CFTC) has fined
NinjaTrader Clearing, LLC (NTC) $983,425 for failing to adequately supervise
employee handling of accounts linked to a fraudulent case.
Fraudulent Account Handling
According to the CFTC, the Illinois-based futures
commission merchant failed to exercise due diligence in overseeing employee
actions in managing suspected fraudulent accounts. A statutory restraining
order (SRO) required NinjaTrader to freeze or restrict these accounts
immediately, yet the firm reportedly did not act promptly.
The watchdog mentioned that this failure resulted in open positions losing over $200,000 in value, compounding the financial damage from the fraudulent schemes. Central to the matter, the CFTC mentioned that the
company did not implement sufficient policies and procedures for handling such
emergencies.
From late 2020 onwards, NinjaTrader reportedly failed
to develop proper protocols for dealing with court orders affecting the flagged
accounts. Despite receiving the SRO in January 2022, the regulator claims the
firm allowed the suspected accounts to remain active.
Penalties and Restitution
As part of the settlement, the CFTC levied a civil
monetary penalty of $750,000 on NTC. In addition, the firm must pay $233,425 in
restitution, which will be distributed to fraud victims.
Expect ongoing updates as this story evolves.
This post is originally published on FINANCEMAGNATES.
