I wrote about this in my column last February and then followed it up in the March issue of Euromoney. This is from the column:
Brand new thing
Reputational risk is something that is undoubtedly hard to quantify. But make no mistake, once a reputation gets tarnished, itâs hard to buff it back to a glistening shine again. Last week, I got an email from my muckers at Tradex Capital Markets, an established and reputable company based in Greenwich, Connecticut. It had the words urgent notice in the subject line and warned âfriends and investorsâ to: âPlease be advised that there is absolutely no relationship, direct or indirect, between the expelled entity âTradex Groupâ and our company, Tradex Capital Marketsâ (their italics).
The company has found itself inadvertently caught up in the woes of the similarly named Tradex Group, which will be barred permanently from carrying out activities in the US by the National Futures Association (NFA) from February 15. The action was taken because Tradex Group had been, according to the NFA: âallegedly soliciting retail investors to trade off-exchange foreign currency futures and options with its parent company, Tradex Handel & Beratungs.â
The NFA added: âThe Commodity Exchange Act explicitly prohibits the offering of forex transactions to retail investors, unless the counter-party is a regulated entity as defined in the act. Tradex AG was not registered as a counter-party. In addition to the permanent ban, Tradex was also ordered to pay $22,000 in restitution to its customers in the United States.â
Tradex Capitalâs email told investors: âOur CFTC Registration and NFA membership (NFA No. 0299045) are current and in good standing, and we have a spotless compliance and regulatory record. As our investors know, we do not and have never offered any retail currency products or services. We have never been involved in any regulatory action, NFA arbitration, or CFTC reparations proceedings. All our principals and officers are also registered and in good standing.â
Thereâs more to say about Tradex Group. Iâve spoken to three individuals connected to the company and thereâs a lot of mud-slinging and accusations being made, which I shall report in Marchâs issue of Euromoney.
Tradex Capital will ultimately be unaffected by the shenanigans at the now barred Tradex Group. Its track record is sound and older readers will remember its legendary chairman Rony Schläpfer from his role in the 1980s documentary Billion dollar day. Last November, I joked with a mate at the company that it should rebrand because it was easy to see how investors got it confused with the other mob. This incident shows how fragile a reputation is and how it can be potentially damaged even when there is no actual connection between two companies.
Brand new thing
Reputational risk is something that is undoubtedly hard to quantify. But make no mistake, once a reputation gets tarnished, itâs hard to buff it back to a glistening shine again. Last week, I got an email from my muckers at Tradex Capital Markets, an established and reputable company based in Greenwich, Connecticut. It had the words urgent notice in the subject line and warned âfriends and investorsâ to: âPlease be advised that there is absolutely no relationship, direct or indirect, between the expelled entity âTradex Groupâ and our company, Tradex Capital Marketsâ (their italics).
The company has found itself inadvertently caught up in the woes of the similarly named Tradex Group, which will be barred permanently from carrying out activities in the US by the National Futures Association (NFA) from February 15. The action was taken because Tradex Group had been, according to the NFA: âallegedly soliciting retail investors to trade off-exchange foreign currency futures and options with its parent company, Tradex Handel & Beratungs.â
The NFA added: âThe Commodity Exchange Act explicitly prohibits the offering of forex transactions to retail investors, unless the counter-party is a regulated entity as defined in the act. Tradex AG was not registered as a counter-party. In addition to the permanent ban, Tradex was also ordered to pay $22,000 in restitution to its customers in the United States.â
Tradex Capitalâs email told investors: âOur CFTC Registration and NFA membership (NFA No. 0299045) are current and in good standing, and we have a spotless compliance and regulatory record. As our investors know, we do not and have never offered any retail currency products or services. We have never been involved in any regulatory action, NFA arbitration, or CFTC reparations proceedings. All our principals and officers are also registered and in good standing.â
Thereâs more to say about Tradex Group. Iâve spoken to three individuals connected to the company and thereâs a lot of mud-slinging and accusations being made, which I shall report in Marchâs issue of Euromoney.
Tradex Capital will ultimately be unaffected by the shenanigans at the now barred Tradex Group. Its track record is sound and older readers will remember its legendary chairman Rony Schläpfer from his role in the 1980s documentary Billion dollar day. Last November, I joked with a mate at the company that it should rebrand because it was easy to see how investors got it confused with the other mob. This incident shows how fragile a reputation is and how it can be potentially damaged even when there is no actual connection between two companies.