The US National Futures Association (NFA) has ordered Marex Spectron International Limited, an NFA Member introducing broker located in London, U.K., to pay a $350,000 fine.

The Decision, issued by NFA’s Business Conduct Committee (BCC), is based on a Complaint issued by the BCC and a settlement offer submitted by Marex Spectron, in which the firm neither admitted nor denied the allegations in the Complaint. The Complaint alleged that Marex Spectron failed to prevent individuals located outside the U.S. from soliciting and/or accepting orders from U.S. customers without being NFA Associates and registered with the CFTC as associated persons of the firm. The Complaint also alleged that Marex Spectron failed to supervise in connection therewith.

During an examination that commenced in June 2024, NFA identified 14 individuals employed as brokers of Marex Spectron who were soliciting and/or accepting orders from U.S. customers without being NFA Associates and registered with the CFTC as APs of the firm. All 14 of the individuals worked in the firm’s London office, except for one individual who worked in Dubai.

The following example illustrates NFA’s findings. According to Marex Spectron’s March 4, 2024 trade blotter, one of the 14 individuals in London brokered a crude oil contract-for-difference (CFD) trade with a customer whose name was on the firm’s list of U.S. clients (Customer 1). Marex Spectron’s trade confirmation also listed Customer 1 as the “buyer” on the CFD trade, and a September 2022 limited liability company (LLC) document in the firm’s records reported Customer 1 as an active lllinois LLC, headquartered in Chicago.

Therefore, Marex Spectron knew or should have known that the individual who brokered the CFD trade with Customer 1 did not qualify for the Regulation 3.12 exemption and should have been registered as an NFA Associate and AP of the firm but was not.

The 2024 exam revealed these 14 individuals brokered approximately 75 trades for 20 U.S. customers from February 1 to April 30, 2024 and accounted for about 40% (or 14 of 35) of the individuals employed as brokers in the firm’s London energy division.

Under NFA Compliance Rule 2-9(a), Marex Spectron is required to diligently supervise its employees and agents in the conduct of their commodity interest activities for or on behalf of the firm.

However, as alleged, Marex Spectron fell short of fulfilling its supervisory obligations to ensure the firm complied with NFA Requirements applicable to registering individuals as NFA Associates and APs of the firm.

Without admitting or denying the allegations in the Complaint, Marex Spectron proposed to settle the charges against it by agreeing to pay a fine of $350,000 to NFA within 30 days after the effective date of the NFA decision.