FX news: National Futures Association serves complaint to Gain Capital
Gain Capital, its Forex.com division and group CEO Glenn Stevens have been served with a complaint by the National Futures Association (NFA) for five counts of violation including adjusting customer leverage without notification, dictating unfair slippage parameters on MetaTrader and for using a number of unregistered introducing brokers. Gain say they will contest the charges. According to a 20 page NFA document, dated June 30 2010, seen by theWeeklyFiX, the 2009 audit of Gain found that the firm engaged in leverage and margin practices that were harmful to its customers.
“For example, Gain adopted a policy whereby, every Friday, it lowered the leverage for all of its accounts that were allowed to trade at 200:1 leverage - which included the micro accounts - to a 100:1 leverage. The effect of this weekly adjustment was to increase the margin requirement on these accounts from 0.5% to 1%.”
It adds: “Gain did not disclose to its customers - either in account opening documents, on the firm's website, or through any other means - that, if their accounts traded at 200:1 leverage (which included all the micro account customers), they would be subject to these routine weekly leverage/margin adjustments.”