NFA Bans US-Based IB and Imposes $15,000 Penalty for Operational Failures

NFA Bans US-Based IB and Imposes $15,000 Penalty for Operational Failures
NFA Bans US-Based IB and Imposes $15,000 Penalty for Operational Failures

The registered IB, forex and swap firm failed to implement an adequate AML program, amongst other violations.


The US National Futures Association (NFA) has permanently banned a Chicago-based introducing broker (IB), Vankar Trading Corp, from membership and from acting as a principal of an NFA Member, as per a statement today.

It has also banned John S. Karvelas, the sole principal of Vankar, from NFA membership for 10 years, and ordered him to pay a $15,000 fine.

The NFA’s decision follows a complaint authorised by the NFA’s Business Conduct Committee (BCC) on 24 February, 2016 and a settlement offer submitted by Vankar and Karvelas.

The complaint alleged that Vankar failed to maintain required minimum adjusted net capital and current and accurate books and records and that Vankar and Karvelas failed to supervise the firm’s operations.

Case Background

Vankar was registered as an IB, forex firm and swap firm member of the NFA and has been a member since September 2001. ln 2008, the NFA issued a BCC complaint against Vankar for failing to implement an adequate anti-money laundering program.

Vankar settled the complaint by paying a fine of $12,500. ln 2013, the NFA performed an examination of Vankar as a result of which it made multiple adjustments to the firm’s net capital computation, which significantly decreased the firm’s excess net capital.

ln August 2013, the NFA issued Vankar a staff letter citing the firm for failing to hire an independent CPA to complete a certified financial statement for Vankar. ln December 2014, it issued Vankar another staff letter for being under its minimum adjusted net capital requirement.

Given Vankar’s prior compliance issues, the NFA commenced an exam of Vankar in July 2015. At the time of the exam, the firm was not acting in the capacity of a swap firm, but was conducting both futures and forex business. The NFA’s 2015 exam found that Vankar failed to maintain required minimum adjusted net capital, failed to maintain current books and records, and together with Karvelas failed to supervise the firm’s operations.

Penalties

At the conclusion of the proceedings conducted in connection with the complaint, the committee imposed bans on Vankar and Karvelas from NFA membership and imposed a fine of $15,000 fine on Karvelas for the aforementioned violations.

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