AVS Carter Financial, Inc. Violates NFA Compliance Rules

AVS Carter Financial, Inc. Cited by NFA for Misleading Customers, Insufficient Supervision

On August 25, 2009, the NFA filed a complaint against Chicago-based commodity trader advisor (“CTA”) AVS Carter Financial, Inc. (“AVS Carter”) AVS Carter’s website indicates that it has various entities with similar names, such as AVS Carter Trading Inc. and AVS Carter Asset Management Ltd., which are all foreign firms. The website also mentioned that AVS Carter is a registered member of the NFA.

The NFA complaint alleged that the website is misleading because it implies that all of the AVS Carter entities are NFA-regulated, and thus violates NFA Compliance Rule 2-36(b)(1), which “prohibits a Member from cheating, defrauding, deceiving, or attempting to cheat, defraud, or deceive customers”.

The NFA further alleged that AVS Carter acted “in concert with the other AVS Carter entities…in an attempt to mislead and confuse customers as to the specific AVS Carter entity they were dealing with”.

The second violation cited is based on NFA Compliance Rule 2-36(e), which requires forex dealer members (“FDMs”) to “diligently supervise and its employees and agents”. Shahzad Akram (“Akram”), who was AVS Carter’s only associated person (“AP”)/principal and lies and works in Dubai, appeared to have “very little knowledge of the firm’s activities and [do] no real work for the firm”. Akram was personally cited for this violation.

In the NFA Decision, AVS Carter agreed to withdraw from NFA membership and be permanently barred from NFA membership in the future and from acting as a principal of an NFA Member firm and deactivate all of its websites. Akram agreed to not apply for NFA Membership (or associate membership) or to act as a principal of an NFA member for two years. He also agreed that if he applies for NFA membership after the two years, he will pay a $5,000 fine to the NFA.

To read the NFA Complaint, click here.

To the read the NFA Decision, click here.

The full text of the NFA Press Release is reprinted below and can also be found here.

****

For Immediate Release
April 27, 2010

For more information contact:
Larry Dyekman (312) 781-1372, ldyekman@nfa.futures.org
Karen Wuertz (312) 781-1335, kwuertz@nfa.futures.org

NFA permanently bars Chicago firm AVS Carter Financial, Inc. and sanctions its principal

April 27, Chicago - National Futures Association (NFA) has permanently barred AVS Carter Financial, Inc. (AVS Carter Financial) from NFA membership. AVS Carter Financial is a Commodity Trading Advisor located in Chicago, Illinois. Shahzad Akram, the firm’s sole principal, is also barred from NFA membership for a period of two years. Akram must pay a fine of $5,000 if he reapplies for NFA membership after the expiration of the two-year bar. The Decision, issued by an NFA Hearing Panel, is based on an NFA Complaint filed in August 2009 and a settlement offer submitted by AVS Carter Financial and Akram. As part of its settlement, AVS Carter Financial agreed to permanently withdraw from NFA membership and consented to findings that it committed the violations alleged in the Complaint without admitting or denying the allegations. Ahmad Mirza, Vivek Reddy, and Sabyasachi Upadhyay are expressly excluded from the bar imposed on AVS Carter Financial.

The Panel found that AVS Carter Financial used a misleading website as well as misleading customer account documents and account statements. As alleged in the Complaint, all of the U.S. customers with whom NFA spoke expressed confusion regarding the non-regulated “AVS Carter” entity they were doing business with as well as which entities were actually regulated. Only AVS Carter Financial was regulated by the Commodity Futures Trading Commission and NFA. The Panel also found that Akram failed to supervise AVS Carter Financial’s promotional material and website.

Along with the permanent bar, AVS Carter Financial must also deactivate, if it has not done so already, all of its websites that promote the firm and websites over which the firm has control.

The complete text of the Complaint, respondents’ Answer and Decision can be found on NFA’s website (www.nfa.futures.org).

NFA is the premier independent provider of innovative and efficient regulatory programs that safeguard the integrity of the futures markets.

****

Other related forex law articles include:

Bart Mallon, Esq. of Mallon P.C. runs the Forex Law Blog and provides forex registration service through forexregistration.com. Mr. Mallon also runs the Hedge Fund Law Blog. He can be reached directly at 415-868-5345.

May 13, 2010 | Filed Under Forex Resources, Laws and Regulations

 

Comments

Leave a Reply