CFTC Fined Marex and Marex Spectron for Violation Against Minimum Net Capital Requirement

​The US securities regulator CFTC has fined global commodities brokerage Marex North America LLC of $250,000 and Marex Spectron of $120,000 as civil penalties respectively for their failure in maintaining minimum net capital as required.

Both companies have signed a revolving line of credit agreement with an affiliated company. During the guarantee period, about $10 million ~ $95 million funds were channeled to the beneficiary from registered futures commission merchant Marex and registered introducing broker Marex Spectron periodically.

However, neither of them have deducted the huge amounts in their accounting (adjusted net capital) as required, which would lead both of them to be undercapitalized.

If those funds have been correctly deducted, Marex would have been undercapitalized for 33 months with a shortfall of net capital ranging from $4 million to $75 million, and Marex Spectron for 6 of the 10 six-month periods (introducing brokers report adjusted net capital every six months) with a fund shortfall ranging from $14 million to $51 million.

“The Division of Enforcement will remain vigilant in enforcing minimum capital requirements for registered entities as they serve as important safeguards for the industry and its customers,” said Division of Enforcement Director James McDonald.

Division of Swap Dealer and Intermediary Oversight Director Joshua B. Sterling added, “We will continue to work closely and cooperatively with the Division of Enforcement to address deficiencies in required minimum adjusted net capital.”

CFTC also issued similar orders charging against Houston, Chicago, and London-Based introducing brokers for net capital deficiencies on the same day. Companies involved are EOX Holdings LLC, Futures International LLC, and OTC Europe LLP.