The latest edition of the Investor Newsletter of the United States National Futures Association (NFA) was published today. The document includes the most recent enforcement actions taken by NFA, including one against eDeal Market LLC.
NFA’s Business Conduct Committee (BCC) has issued a Complaint against eDeal Market LLC and Nithya Narasimhan, charging them with failing to supervise and failing to cooperate fully and promptly with an NFA examination.
The Complaint also charges eDeal with acting in the capacity of an FCM or RFED without registration or exemption; failing to list two individuals as principals of eDeal and allowing one of those individuals to act as an AP of eDeal without being registered as such; making prohibited representations regarding NFA; and using misleading promotional material.
eDeal is located in Chennai, India. The firm was a CPO/CTA member from August 14, 2019 to December 7, 2021, when the firm’s NFA membership and CFTC registration statuses were withdrawn.
During the relevant period, Nithya Narasimhan was identified as COO of the firm.
In September 2021, NFA commenced an examination of eDeal, which noted several deficiencies. Most significantly, eDeal and Narasimhan failed to cooperate fully with NFA’s exam. The exam also found that eDeal apparently operated as a retail Forex dealer without being registered with the CFTC as a futures commission merchant (FCM) or retail foreign exchange dealer (RFED), and that the firm was using misleading promotional material.
A statement on eDeal’s website, with the address – fxedeal.com, claimed that the company is a “trusted broker for multiple asset classes, including Forex, Indices, Commodities…”. The website also offered clients the option to select from various platforms, including MT4. NFA notes that these platforms are typically used by Forex dealers.
When NFA questioned Narasimhan about the firm’s operations, she indicated that the firm provides a trading platform for clients in India and the UAE only but is not operating as Forex dealer. However, NFA found that the “Open Live Account” section of eDeal’s website permitted US customers to open an account to trade Forex and other products, until around November 2021 when the website was changed.
NFA also found that the website the firm used previously – edealfx.com, likewise offered US customers the option of opening a trading account through a drop-down menu that listed “United States”.
That is why, eDeal is charged with violations of NFA Compliance Rule 2-2(i).
eDeal faces significant penalties, including a fine of up to $500,000 for each violation found, as well as bar or suspension from NFA membership.