NFA charges ZuluTrade and CEO Leon Yohai
LeapRate has learned from regulatory filings that US financial regulatory body the National Futures Association (NFA) has issued a complaint to ZuluTrade and its principal Leon Yohai Giochais (known in the Forex industry just as Leon Yohai). The complaint charged ZuluTrade with failing to maintain minimum net capital and failing to implement the firm’s anti-money laundering (AML) program.
The complaint charged Leon Yohai personally with failing to adequately supervise the firm’s employees, agents and operations.
ZuluTrade and Leon Yohai have 30 days to issue a written response to the NFA’s complaint. While the events detailed occurred more than a year ago and the amounts involved in which ZuluTrade was ‘offside’ regulatory capital requirements were relatively small, the charges are nevertheless serious and could potentially result in ZuluTrade’s expulsion or suspension for a specified period from NFA membership.
ZuluTrade is a copy and social trading platform provider, and is registered as an introducing broker (lB) member of the NFA, required in order for the company to collect fees from the US-based brokers which utilize its platform.
The NFA noted that ZuluTrade, based in Greece, has a history of regulatory problems. In 2011, the NFA issued a complaint against ZuluTrade for failing to maintain required minimum adjusted net capital and failing to keep required books and records. ZuluTrade settled the case by agreeing to pay a fine of $10,000.
In September 2014, the Office of Foreign Assets Control (OFAC) of the U.S. Department of Treasury took an enforcement action against ZuluTrade for introducing accounts for over 400 individuals from lran, Sudan, and Syria, countries with which ZuluTrade was prohibited from doing business. ZuluTrade was fined $200,000 in the OFAC action.
The CFTC also took an action in September 2014 against ZuluTrade, charging the firm with failure to supervise its AML program by not implementing its procedures for screening potential account holders to determine if they were from OFAC targeted countries. ZuluTrade settled the CFTC case by agreeing to pay a $150,000 fine and disgorge profits of $80,000.