Unregulated investment scheme Olint says it is seeking legal advice on what action it can take against a United States-based regulatory agency that alleged that its principal, David Smith, was involved in suspicious activity.

The National Futures Association (NFA), a regulatory organisation for the US futures industry, filed a complaint to its business conduct committee against I-Trade FX LLC (and one of its principals, Isaac Martinez), a company it alleges Smith was a principal of.

The complaint, filed in Chicago, Illinois, stated that I-Trade, for approximately nine months in 2007, listed Smith, operator of Olint and TCI FX Traders, as a principal based on the capital he contributed to the company. Smith allegedly contributed almost 100 per cent of the firm's capital.

In detailing information on I-Trade, NFA said: "because of the concerns about Smith's background and the source of funds he used to capitalise I-Trade, NFA commenced an investigation of I-Trade's operations."

No longer principal

The complaint filed further noted: "As part of its investigation, NFA asked I-Trade to provide Smith's personal bank records. However, I-Trade claimed that it was unable to obtain Smith's bank records, and therefore withdrew Smith as a principal on December 31, 2007, and repaid his membership interest in the firm."

Olint has hit back at the complaint and, in its letter dated July 3, to club members and customers, stated, "David Smith and Olint is not the subject of the complaint and is not the subject of the investigation."

Olint said it was "unfortunate" that NFA should mention the name of Smith and Olint in its complaint in the manner that it has and both parties have been advised to seek legal advice in the relevant jurisdiction.

The letter to investors further stated: "That complaint was filed against those entities/persons after an investigative report on I-trade was submitted by the compliance department of the private body National Futures Association."

I-Trade FX, LLC (ITFX) also issued a letter to its investors. The letter noted that: "ITFX does not participate in laundering money and we strive to meet and exceed the reporting requirements regarding any suspicious activities to the proper authorities".