The NFA Imposes A $700,000 Fine On GAIN CAPITAL

The Decision was issued by NFA's Business Conduct Committee (BCC) and is based on a Complaint issued by the BCC as well as a settlement offer submitted by Gain and Alexander Robert Bobinski, Jr., an associated person, principal of the firm, and Associate Member of NFA.

The firm and Bobinski did not admit or deny the allegations in the Complaint in the settlement offer.

The BCC found that Gain violated NFA Compliance Rule 2-43(a)(1) by improperly adjusting customer accounts following a system malfunction; violated NFA Compliance Rule 2-36(c) by its treatment of customers affected by the system malfunction and Gain's account adjustments; violated NFA Compliance Rules 2-5 and 2-36(c) by submitting inaccurate and incomplete information to NFA; and failed to supervise.

Bobinski also violated NFA Compliance Rule 2-36(e) by failing to supervise, according to the BCC.

Gain was charged in Count I of the Complaint with improperly adjusting customer accounts, an apparent violation of NFA Compliance Rule 2-43(a) (1).

From about 2:55 pm 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.

GAIN had incurred approximately $3 million in losses on executed customer orders by the time the system malfunction was resolved. GAIN negatively adjusted the accounts of 17 customers by approximately $2.84 million. It added approximately $35,000 to the accounts of 33 customers.

The changes were directly authorized by GAIN CEO Bobinski.

Gain was charged in Count II of the Complaint with failing to observe high standards of commercial honor and just and equitable principles of trade by treating customers unfairly as a result of a system malfunction and Gain's account adjustments, in apparent violation of NFA Compliance Rule 2-36. (c).

Gain and Bobinski were charged in Count III of the Complaint with failing to cooperate and failing to observe high standards of commercial honor and just and equitable trading principles 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) (e).

GAIN Capital was acquired by StoneX in the summer of 2020.

About Gain Capital

GAIN Capital is a brokerage firm that specializes in foreign currency trading (forex). This brokerage operates various products and downstream firms that sell their services to the public. While you may not exactly realize that you‘re dealing with GAIN Capital, if you trade in the forex market there’s a high possibility youve stumbled across them. A financial adviser can assist you in selecting a currency trading platform that is appropriate for your objectives, budget, and risk tolerance.

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