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The NFA and FXCM lawsuit development with the CFTC

Redwan Eid | Mar. 20, 2019
The NFA and FXCM lawsuit development with the CFTC

March 20, 2019, | AtoZ Markets - The Seventh Circuit U.S. Court of Appeals has invited the Commodity Futures Trading Commission (CFTC) to file an amicus brief about the lawsuit filed by Effex Capital against the National Futures Association (NFA).

Effex Capital LLC had brought this action in the U.S District Court for the Northern District of Illinois in Feb. 2017, where it alleged that the NFA committed several state law torts, violating the Illinois Trade Secret Act, and the Fifth Amendment’s Due Process Clause through its actions with regard to a settlement between the NFA and its member Forex Capital Markets, LLC (FXCM).

NFA published misleading statements and defamed Effex Capital reputation

The filing paper says that Effex saw the statements the NFA published as defamatory, interfere with its business relations, and include confidential and proprietary information. As a non-party to the settlement and non-member of the NFA, Effex also added that it was deprived of procedural due process because it was unable to take part in the settlement between the NFA and FXCM, after the Forex broker filed for bankruptcy due to the impact of SNB black swan in 2015. Also, Effex said that it did not have the opportunity to “contest references” to it as for the related settlement documents.

Effex had stressed in its claim that the NFA published false and misleading statements about it (about Effex) in four NFA documents related to the FXCM settlement: A Complaint, a Decision, a Narrative of the Decision, and a Press Release.

The NFA and FXCM lawsuit development: CFTC to file amicus brief

As the case has not been closed yet, the CFTC submitted a Motion with the court on March 19, requesting a two-week time prolongation to whether file a possible amicus brief or not. Therefore, the deadline would then move from March 25, 2019 to April 8, 2019 (pursuant to the Court’s grant of the CFTC’s previous motion to extend time).

The CFTC has already been granted a postponement until March 25, 2019 to determine its stance. Today, the US regulator asks for another prolongation of time to decide on whether to file such a brief or not.

To make a decision to file an amicus brief in this case, an approval should be obtained by all of the five commissioners appointed by the president, and certified by the senate.  

On its turn, the CFTC Office of the General Counsel provided the Commission with its own recommendation as for an amicus brief.

In a disconnected context, the United States Commodity Futures Trading Commission (CFTC) asked the public on Dec. 2018 to provide their input on the guidance of Ethereum (ETH) blockchain. The CFTC was trying in taking such an initiative, to improve the commission’s comprehension of Ethereum, where the former highlighted in a press release published Dec. 11, that it is considers publishing a Request for Information (RFI) with the Federal Register, as per reports.

Disclaimer: The views and opinions expressed in this article are solely those of the author and do not reflect the official policy or position of AtoZ Markets.com, nor should they be attributed to AtoZMarkets.