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October 04, 2012
NFA permanently bars New York commodity trading advisor, BKT Capital Management, and Basil R. Fayadh, an associated person and principal
October 4, Chicago - National Futures Association (NFA) has permanently barred BKT Capital Management LLC (BKT Capital), a commodity trading advisor located in New York, N.Y., and Basil R. Fayadh, an associated person (AP) and listed principal of BKT Capital.
The Decision, issued by NFA's Business Conduct Committee (BCC), is based on the Complaint and settlement offer submitted by BKT Capital and Fayadh. Both BKT Capital and Fayadh entered into the settlement without admitting or denying the allegations presented in the Complaint.
On January 27, 2012, NFA issued a Member Responsibility Action (MRA) against BKT Capital and Fayadh (see previous press release). NFA's BCC subsequently issued a Complaint against BKT Capital and Fayadh on October 1, 2012, alleging that both parties failed to promptly and fully cooperate with NFA during the course of its examination and investigation of BKT Capital, and willfully providing false and misleading information to NFA.
The Complaint alleged that BKT Capital and Fayadh were pending as a forex firm and forex AP, respectively, but had not been approved because Fayadh had not passed the Series 34 exam. When asked why neither Fayadh nor his firm were forex approved, he told NFA that he repeatedly took and failed the Series 34 exam. However, NFA records indicated that he had only registered to take the exam twice, and had failed the exam just once.
In addition, prior to working at BKT Capital, Fayadah was a managing member of Paragon FX Enterprises LLC (Paragon FX), against which the Commodity Futures Trading Commission filed an enforcement action in October 2011, charging the firm with operating as a retail foreign exchange dealer without being registered as such.
While knowing of Fayadh's previous affiliation with Paragon FX, NFA learned through its Forex Transaction Reporting Execution Surveillance System on January 9 that Fayadh had opened a trading account at an NFA Forex Dealer Member, and funded the account with about $50,000 that he failed to disclose to NFA. As a result of these actions, NFA conducted an unannounced audit of BKT Capital on January 24, leading to the issuance of the MRA against BKT Capital and Fayadh.