The U.S. derivatives industry's front-line regulator is entangled in a dispute with one of its board members who says the group held flawed director elections that compromise its independence.

The National Futures Association (NFA), an industry-funded overseer, is clashing with James Koutoulas over his allegations that the group tried to cover up the fact that it never nominated a slate of directors who joined the board last year. Koutoulas said the market's main federal regulator, the Commodity Futures Trading Commission (CFTC), is investigating his claims after he filed a whistle-blower complaint.

The NFA has reviewed the allegations and concluded they're not true, Christopher Hehmeyer, who chairs the group's board, said in an interview.