OANDA hit with $500,000 fine for capital violations
Toronto, Canada based Retail FX and CFD broker OANDA Corporation was hit with a $500,000 fine by US regulators for violating capital requirement rules, as well as reporting and supervisory issues.
The U.S. Commodity Futures Trading Commission (CFTC) announced that it has issued an order filing and settling charges against OANDA Corporation, a futures commission merchant (FCM) and retail foreign exchange dealer (RFED) headquartered in Toronto, Canada, for violating certain capital, reporting, and supervision rules.
Specifically, the CFTC stated that OANDA failed to meet minimum net capital requirements, violated the equity withdrawal restriction in making dividend payments on three occasions, failed to meet certain reporting requirements, and failed to diligently supervise matters related to its business as a CFTC registrant. The order requires OANDA to pay a $500,000 civil monetary penalty and to cease and desist from any further violations of CFTC regulations, as charged.
“The CFTC’s capital, reporting, and supervision requirements are critical to ensuring market integrity and the protection of customers,” said Division of Enforcement Director James McDonald. “We will continue to be diligent in holding firms accountable for violating these regulations.”
“Capital requirements are a cornerstone of the regulatory framework governing CFTC-regulated intermediaries and we will continue to monitor firms for compliance with these important rules,” added Division of Swap Dealer and Intermediary Oversight Director Joshua B. Sterling. “We look forward to continuing to work with the Division of Enforcement when firms fall short of their financial obligations.”
The order finds that, in or around October 2018 and during the period April 2019 to August 2019, OANDA failed at times to meet certain capital requirements applicable to FCMs offering or engaging in retail foreign currency transactions and/or to RFEDs. OANDA failed to meet net capital requirements from April 26, 2019 to August 21, 2019 and made dividend payments on October 15, 2018, April 26, 2019, and May 28, 2019 in violation of the equity withdrawal restriction. Additionally, OANDA failed to meet certain financial reporting requirements related to these violations. The order also finds that OANDA did not maintain adequate internal controls with respect to these financial and reporting requirements. Consequently, the firm failed to diligently supervise matters related to its business as a CFTC registrant.
The order recognizes OANDA’s cooperation in the investigation of this matter. The order also notes that the Division of Enforcement found no indication that customers suffered losses as a result of the firm’s net capital and equity withdrawal restriction violations.