October 2, 2019 / 3:49 PM / 2 months ago

Two brokerages are fined $25 million in U.S. over foreign exchange options

NEW YORK, Oct 2 (Reuters) - Two brokerage firms will pay a combined $25 million in penalties to settle charges they employed fraudulent practices to solicit and accept orders from traders to buy and sell foreign exchange options, two regulators in the United States said on Wednesday.

BGC Financial LP agreed to pay $15 million in civil penalties while GFI Securities LLC will pay $10 million, under settlements announced by the U.S. Commodity Futures Trading Commission and New York Attorney General Letitia James.

Regulators said both companies employed brokers on their respective emerging markets foreign exchange options desks who made false representations about trading activity, including by reporting fake trades.

The regulators said this was done to create an illusion that markets were more liquid than they actually were, to induce clients to trade at prices they might otherwise not accept.

Reporting by Jonathan Stempel in New York Editing by Chizu Nomiyama

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