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April 14, 2015
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NFA orders Memphis, Tenn. firm Dow McVean Capital Management LLC and its principal, Charles Dow McVean, Jr., to pay $105,000 fine
April 14, Chicago — National Futures Association (NFA) has ordered Dow McVean Capital Management LLC (Dow McVean Capital) and Charles Dow McVean Jr. to pay a $105,000 fine. Dow McVean Capital is an NFA Member commodity trading advisor located in Memphis, Tenn. McVean Jr. is the sole principal and associated person of the firm. The Decision, issued by NFA's Business Conduct Committee (BCC), is based on a Complaint, and a settlement offer submitted by Dow McVean Capital and McVean Jr.
The Complaint alleges that Dow McVean Capital failed to maintain an audit trail of bunched customer order allocations that was objective and specific enough to permit independent verification of the fairness of the allocations and sufficient to demonstrate that the firm used a defined methodology. The Complaint further alleges that Dow McVean Capital failed to enact required procedures regarding allocations from bunched customer orders. The Complaint also charged McVean Jr. with failure to diligently supervise Dow McVean Capital's operations.
Post-execution allocation is a procedure during which an account manager is permitted to bunch customer orders together for execution, and to allocate them to individual accounts by no later than the end of the day. Bunching of orders involves an account manager placing trades for two or more customers at the same time in the same order. After the bunched orders are executed, an account manager must assign the trades to customers' accounts, a process known as allocation.
Dow McVean Capital and McVean Jr. neither admitted nor denied the allegations.