ZuluTrade maybe out of US this October. Another fine charged by NFA.
US NFA(National Futures Association) has made another case decision in the matter of ZuluTrade Inc and its founder Leon Yohai Giochais, both are previously members of NFA.
The new case was filed on September 30th, and its alleged violations of NFA requirements are as follows:
- ZuluTrade failing to maintain required minimum adjusted net capital
- ZuluTrade failing to implement AML(Anti Money Laundering) procedures
- ZuluTrade and its founder Leon Yohai failing to adequately supervise its employees, agents and its futures and Forex operations
According to the case document released by NFA, ZuluTrade and Leon Yohai Giochais are required to pay settlement fees in order to proceed with an application of NFA membership and retrieve it.
Is ZuluTrade out of Capital?
ZuluTrade offers copy and social trading platform for Forex and CFD traders. The company has been registered and offering services all over the world including US, Europe and Japan.
This time ZuluTrade and its founder have been officially suspended from its NFA memberships, meaning that they are no longer able to continue with its service in US area. The effective date of the above case is on October 17th in 2016.
ZuluTrade is now being asked whether they want to continue its operation in US or not.
There is no official statement from ZuluTrade or its founder Leon Yohai Giochais.
This isn’t the first case filed by NFA against ZuluTrade
On November 15, 2011, NFA issued a Complaint charging ZuluTrade with failure to maintain required books and records, failure to maintain required capital, and failure to give required notice. Zulu’s settlement offer was to pay a $10,000 fine that time.
On September 9th, 2014, CFTC Orders Zulutrade Inc. to Pay $150,000 Penalty and Disgorge Profits of $80,000 to Settle Charges of Failure to follow its procedures for screening for account holders.
It was also known that ZuluTrade had been borrowing funds from its affiliates in order to cover the short of funds.
ZuluTrade seems to be low in financial aspect.
Offer of Settlement
This time NFA has offered the following settlement offer:
Zulu and Giochais – neither of which currently has any NFA membership status – submitted an offer in which, without admitting or denying the allegations of the Complaint, they agreed that, in the event Zulu or Giochais applies for NFA membership status at anytime in the future, they shall pay a fine of $30,000 to NFA payable at the time of their application. Zulu and Giochais acknowledged and agreed that no action shall be taken on their application for NFA membership status until the foregoing fine is fully paid. Once the fine is fully paid by either Zulu or Giochais, both are relieved from any further liability for the fine. Further, without admitting or denying the allegations of the Complaint, Zulu and Giochais stipulated and agreed that any Decision accepting their Offer shall include findings that they committed the violations alleged against them in the Complaint.
Technically, NFA has decided to not proceed with its membership application until the fine is paid.
What happens now?
Now that ZuluTrade has got 2 weeks to decide whether the company will stay with US Forex markets.
In case the company(its founder Leon Yohai) decides to exit from the US Markets, ZuluTrade will no longer be able to provide service to US residents.
But ZuluTrade has got only a few partnered Forex brokers which are promoting to US residents, so it shouldn’t be a big deal for ZuluTrade.
ZuluTrade or its founder Leon Yohai haven’t made an official announcement, and we are waiting for their decision.
Either way, ZuluTrade may continue its operation to countries outside of US.