NFA files complaint against GAIN Capital for improperly adjusting customer accounts
The National Futures Association (NFA) today published its latest Investor Newsletter, revealing its latest enforcement actions. The list includes NFA’s complaint against online trading company GAIN Capital and its associated person (AP) Alexander Robert Bobinski, Jr.
On September 15, 2022, NFA’s Business Conduct Committee (BCC) issued a Complaint against Gain Capital Group LLC and Alexander Robert Bobinski, Jr.
Count I of the Complaint charged Gain with improperly adjusting customer accounts, in apparent violation of NFA Compliance Rule 2-43(a)(1).
From about 2:55pm on March 31, 2021 to about 1:00 am on April 1, 2021, GAIN experienced a malfunction on its FOREX.com trading platform, in which customers were able to execute stop and limit orders in 14 currency pairs at prices that did not reflect the current prices being published by the firm on its platform.
By the time GAIN had stopped the system malfunction, the firm had incurred about $3 million in losses on executed customer orders. GAIN negatively adjusted the accounts of 17 customers by approximately $2.84 million. It positively adjusted the accounts of 33 customers by approximately $35,000.
GAIN’s CEO Bobinski personally approved the adjustments.
Count II of the Complaint charged Gain with failing to observe high standards of commercial honor and just and equitable principles of trade by unfair treatment of customers affected by a system malfunction and Gain’s account adjustments, in apparent violation of NFA Compliance Rule 2-36(c).
Count III of the Complaint charged Gain and Bobinski with failing to cooperate and failing to observe high standards of commercial honor and just and equitable principles of trade by repeatedly submitting inaccurate and incomplete information to NFA, in apparent violation of NFA Compliance Rules 2-5 and 2-36(c).
Count IV of the Complaint charged Gain with failing to supervise, in apparent violation of NFA Compliance Rules 2-9(a) and 2-36(e); and charged Bobinski with failing to supervise, in violation of NFA Compliance Rule 2-36(e).