The U.S. NationalFutures Association (NFA) has expelled a brokerage from its membership afterfinding the firm misled customers with deceptive trading results and salespitches.TradersEdge Inc., based in New Jersey, must withdraw from NFA membership and cannotreapply, according to a decision released this week. The introducing brokerviolated multiple compliance rules by showing trading profits without deductingcommissions and fees, while failing to properly warn customers about potentiallosses.NFA Expels Broker That HidTrading Costs from ClientsThe casestarted when NFA's Business Conduct Committee filed a complaint against TradersEdge earlier this year. Rather than fight the charges, the firm agreed to asettlement without admitting or denying wrongdoing.The NFAhearing panel found that Traders Edge's website displayed trading results thatlooked more profitable than they actually were. The firm showed gross returnswithout subtracting the costs customers would actually pay, making theperformance appear better than reality.Even worse,when the company talked about potential profits on its website, it didn't giveequal attention to the risk of loss that comes with futures trading. Thisviolates basic disclosure rules that protect retail investors from misleadingclaims.Theviolations didn't stop at the website. NFA investigators found that TradersEdge employees made deceptive sales pitches when talking to prospectivecustomers, breaking rules about honest communication in the futures industry.“TradersEdge agreed to withdraw from NFA membership and, thereafter, not reapply forNFA membership or act as a principal of an NFA Member at any time in the future,”the NFA commented in its decision.You may also like: NinjaTrader Fined $250,000 by National Futures Association Over Compliance FailuresFee Disclosure ProblemsBeyond themarketing issues, Traders Edge failed to properly tell customers about feesbefore they started trading. This seemingly basic requirement helps ensuretraders understand the true cost of doing business before they commit money.The firmalso couldn't adequately supervise its operations and employees, according tothe hearing panel. This supervisory failure meant problems went unchecked andlikely contributed to the other violations.Introducingbrokers like Traders Edge serve as intermediaries, connecting customers withlarger clearing firms that actually execute trades. While they don't holdcustomer funds, they still must follow strict rules about how they presenttrading opportunities.The NFA has also recently raised concerns about issues on the other side of the equation, specifically, the creation of fraudulent trading accounts that harm futures brokers. Scammers use fake IDs to open multiple accounts, employing high-risk strategies and attempting to withdraw funds quickly if trades turn out to be profitable.This article was written by Damian Chmiel at www.financemagnates.com.