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Complaint Alpari US LLC&JermaineHarmon&RichardLani 2012 0629

Complaint Alpari US LLC&JermaineHarmon&RichardLani 2012 0629

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Published by: forexmagnates on Jul 26, 2012
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05/13/2014

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FILED
NATIONALFUTURESASSOCIATIONBEFORETHEBUSINESSCONDUCTCOMMITTEE
JUN292012
IntheMatterof:)
)
ALPARIUSLLC
)
(NFAID#379678),
)
)JERMAINEC.HARMON)(NFAID#422961),))and))RICHARDA.LANI)(NFAID#101840),)
)
Respondents.
)
NATIONALFUTURESASSOCIATIONLEGALDOCKETING
NFACaseNo.12-BCC-020COMPLAINTHavingreviewedtheinvestigativereportsubmittedbytheComplianceDepartmentofNationalFuturesAssociation(NFA),andhavingfoundreasontobelievethatNFARequirementsarebeing,havebeenorareabouttobeviolatedandthatthemattershouldbeadjudicated,NFA'sBusinessConductCommitteeissuesthisComplaintagainstAlpariUSLLC(Alpari),JermaineC.Harmon(Harmon)andRichardA.Lani(Lani).ALLEGATIONSJURISDICTION1.AtalltimesrelevanttothisComplaint,AlpariwasanNFAMemberandapprovedForexDealerMember(FDM),whichwasregisteredwiththeCommodityFuturesTradingCommission(CFTC)asafuturescommissionmerchant(FCM)andRetailForeignExchangeDealer(RFED).Assuch,AlpariwasandisrequiredtocomplywithNFARequirementsandissubjecttodisciplinaryproceedingsforviolationsthereof.
 
2.AtalltimesrelevanttothisComplaint,Harmonhasbeenalistedprincipalandapprovedforexassociatedperson(AP)ofthefirm,andanNFAAssociate.Assuch,HarmonwasandisrequiredtocomplywithNFARequirementsandissubjecttodisciplinaryproceedingsforviolationsthereof.AlpariisliableforviolationsofNFARequirementscommittedbyHarmoninthecourseofhisactivitiesonbehalfofthefirm.3.AtalltimesrelevanttothisComplaint,LanihasbeenalistedprincipalandapprovedforexAPofthefirm,andanNFAAssociate.Assuch,LaniwasandisrequiredtocomplywithNFARequirementsandissubjecttodisciplinaryproceedingsforviolationsthereof.AlpariisliableforviolationsofNFARequirementscommittedbyLaniinthecourseofhisactivitiesonbehalfofthefirm.
BACKGROUND
4.Alpari'smainofficeislocatedinNewYork,NewYorkandthefirmhasbeenanFCMandNFAMembersinceNovember2007.AlparibecameanRFEDinSeptember2010andwasapprovedasanFDMandforexfirminOctober2010.Thefirm'sprincipalbusinessisactingasthecounterpartytocustomeraccountstradinginoff-exchangeforeigncurrencytransactions.5.SinceJanuary2011,HarmonhasbeenaforexAPandprincipalofAlpariandanNFAAssociate.Harmonalsoisaseniorvice-presidentatthefirmandoverseesAlpari'sforexsalesforceandthetradingplatformsthatAlpariutilizes.LanihasbeenaprincipalofAlparisinceJuly2011andbecameaforexAPofthefirmandanNFAAssociateinNovember2011.Inaddition,Laniisthefirm'schiefoperatingofficerandchiefcomplianceofficer(CCO).DanielJ.Skowronski
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(Skowronski)isthechiefexecutiveofficerandalistedprincipalofAlpari,andJenniferGranholm(Granholm)isthefirm'scompliancemanager.However,neitherSkowronskinorGranholmisanAPofAlparioranNFAAssociate.6.InMarch2010,thepercentageofAlpari'sAPswhohadpreviouslyworkedataDisciplinedFirmwassuchthatthefirmtriggeredNFA'sEnhancedSupervisoryRequirements.Sincethen,Alparihasbeenrequired,amongotherthings,totaperecordalltelephoneconversationsbetweenthefirm'sAPsandexistingandpotentialcustomers.7.SinceFebruary2011,NFAhasrequiredFDMs,includingAlpari,tosubmitdailyelectronictradereportsthroughNFA'sForexTransactionReportingExecutionSurveillanceSystem(Fortress).ThesedailyFortressreportsprovidetradedata,whichtheFortresssystemautomaticallyanalyzes,andproduceexceptionreportsthatassistNFAstaffinidentifyingpotentialpricemanipulationsandproblematictradingactivity.Inaddition,FDMsarerequiredtoreportotheractivitiestoNFAthroughFortress,includingmarketeventsandindividualtradeadjustmentsthattheFDMshavemade.8.NFAconductedanauditofAlpariinSeptember2011.Atthattime,Alparihad20APsandofferedforextradingtoabout5,000U.S.customersand2,500foreignforexcustomers.Thefirmalsoofferedforexoptionstoaboutfifteenactivecustomersandhadfourfuturestradingaccounts.Forthetradingofforexoptions,AlpariusedtheplatformofFXBridgeTechnologiesCorporation(FXBridge)fromapproximatelyApril2011untilJanuary2012,whenAlpariceasedofferingforexoptions.
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