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CFTC Sues 11 More Forex Companies

Discussion in 'Forex Articles' started by AsstModerator, Sep 19, 2011.

  1. AsstModerator

    AsstModerator FPA Forums and Reviews Admin

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    It looks like the CFTC isn't done suing unregistered forex brokers.

    I'd like to thank FPA member Freddie Freeman for sending a note to the FPA about this.

    Here's the CFTC Press Release...

    RELEASE: pr6108-11

    September 8, 2011

    CFTC Sues 11 Foreign Currency Firms in Second Nationwide Sweep Against Unregistered Firms
    Cases bring to 25 the number of firms sued by the CFTC for failing to register under the 2008 Farm Bill, the Dodd-Frank Act and the CFTC’s regulations.

    Washington, DC - The U.S. Commodity Futures Trading Commission (CFTC) announced that it simultaneously filed 10 enforcement actions in Federal District Courts in Illinois, New York, Utah, and Wyoming, alleging that 11 entities are illegally soliciting members of the public to engage in foreign currency (forex) transactions and are operating without being registered with the CFTC. These cases follow on the CFTC’s January 26, 2011 filings against 14 other entities for similar violations (see CFTC Press Release 5974-11).

    According to CFTC Director of Enforcement David Meister: “These actions reflect the CFTC’s continued resolve to make the forex market safer for investors by strictly enforcing the CFTC’s new forex regulations, which became effective in October 2010. These new regulations require entities that wish to participate in the forex market to register with the CFTC and abide by regulations that are intended to protect the public from potentially fraudulent operations.”

    The following companies were sued by the CFTC as part of this sweep:

    1st Investment Management, LLC, a Wyoming LLC;

    City Credit Capital, (UK) Ltd., a United Kingdom company;

    Enfinium Pty Ltd., an Australian company;

    GBFX, LLC, a New York LLC;

    Gold & Bennett, LLC, a New York LLC;

    InterForex, Inc., a British Virgin Islands company;

    Lucid Financial, Inc., a Utah corporation;

    MF Financial, Ltd., a Belize company with offices in New York City;

    O.C.M. Online Capital Markets Limited, a British Virgin Islands company

    Trading Point of Financial Instruments Ltd. a Cyprus company; and

    Windsor Brokers, Ltd., a Cyprus company.

    In the forex market, Retail Foreign Exchange Dealers (RFEDs) and Futures Commission Merchants (FCMs) act as the counter-party to their customers’ purchase and sale of forex. Under the Commodity Exchange Act (CEA) and CFTC Regulations, an entity acting as an RFED or FCM must register with the CFTC. Further, with a few exceptions, such an entity also must be registered with the CFTC if it solicits or accepts orders from U.S. investors in connection with forex transactions conducted at an RFED or FCM.

    In all but two of the complaints, the CFTC alleges that a defendant acted as an RFED; that is it offered to take or took the opposite side of a customer’s forex transaction, without being registered. In the remaining two complaints against GBFX, LLC/Gold & Bennett, LLC and Lucid Financial, Inc., the CFTC alleges that the defendant solicited customers to place forex trades at an RFED without being registered as an Introducing Broker. Further, in every complaint, the CFTC alleges that the defendant solicited or accepted orders from U.S. investors to enter into forex transactions in violation of the CEA.

    The CFTC is seeking preliminary injunctions to prevent these defendants from operating as alleged unless and until they comply with the CEA and CFTC Regulations. The CFTC’s complaints also seek civil monetary penalties, trading and registration bans, disgorgement, and rescission.

    With respect to the similar actions filed in January 2011, 11 of the14 defendants have either settled the charges or defaulted, and the charges against the remaining three are pending.

    The CFTC strongly urges the public to check whether a company is registered before investing funds. If a company is not registered, an investor should be wary of providing funds to that company.

    A company’s registration status can be found at: BASIC Search

    The CFTC also strongly urges members of the public to visit the below websites before investing money in the forex market:

    CFTC Consumer Advisory: Forex Fraud: If it sounds too good to be true, it probably is!

    CFTC Consumer Advisory: Foreign Currency "Forex" Fraud

    Fraud Advisory from the CFTC: Foreign Currency Trading (Forex) Fraud CFTC Fraud Advisories - CFTC

    Fraud Advisory from the CFTC: Foreign Currency Trading (Forex) Fraud

    CFTC Fraud Advisories - CFTC

    Foreign Exchange Currency Fraud: CFTC/NASAA Investor Alert

    Foreign Currency Trading - CFTC

    The CFTC Division of Enforcement staff members responsible for these cases are Kathleen Banar, JonMarc Buffa, David Chu, Jennifer Diamond, John Einstman, Rick Glaser, Ava Gould, Amanda Harding, Rosemary Hollinger, Paul Hayeck, Tara Kelly, Joe Konizeski, Jon Kramer, Randolph Lam, Judith McCorkle, Joy McCormack, Susan Padove, Joseph Rosenberg, Jennifer Smiley, Mary Beth Spear, Elizabeth Streit, David Terrell, Richard Wagner, and Scott Williamson.

    The CFTC appreciates the assistance of the United States Attorney’s Office for the District of Wyoming, the Utah Attorney General’s Office, the Utah Division of Securities and the United Kingdom’s Financial Services Authority.

    Media Contacts
    Dennis Holden
    202-418-5088


    Original is at www.cftc.gov/PressRoom/PressReleases/pr6108-11.html
     
  2. Chris Zacharia

    Chris Zacharia XM.com Representative

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    Official Response from Trading Point of Financial Instruments Ltd.

    Trading Point of Financial instruments is aware of the September 8th complaint by CFTC for failure to register according to the new legislation.

    The complaint has yet to be officially served to Trading Point, however the management and legal team of the company are fully aware of the issue and will be in communication with the CFTC staff to speedily resolve the matter.

    Trading Point of Financial Instruments is a European regulated company licensed by CYSEC and in strict compliance with the Markets in Financial Instruments Directive 2004/39/EC (known as "MiFID").

    MIFID is the European Union law that provides harmonized regulation for investment firms across the 30 member states of the European Economic Area. The main objectives of the Directive are to increase competition and consumer protection in investment service.

    The key aspects of MiFID are to ensure amongst others: Authorization, regulation and pass-porting, client categorization, client order handling, pre-trade transparency, post-trade transparency, best execution and Systematic Internaliser.

    MIFID consumer protection regulation is by no means inferior to any non EU equivalent. Moreover the EU directive respects the rights of any responsible trader to trade under the conditions he chooses as long as the substantial risks of financial loss are clearly made known to him.

    Trading Point prides itself on its reputation for having the client’s best interests as its cornerstone. The company respects and does its best to be in line with the laws of every country.

    Finally we want to reassure everyone that the complaint of CFTC for failure to register will be resolved and it does not in any way affect the everyday operations of the company.
     
  3. 4xmets

    4xmets Private

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    I don't get it

    So are they suing some cyprus based companies (the mother company) or just the branch that's located in the US? I'm talking about Windsor Brokers and Trading Point.
     
  4. merlin4x

    merlin4x Banned for uncivilized conduct

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    Have you ever hear about the Globalists?..... New world order?
    That is what it means.
     
  5. opabert

    opabert Recruit

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    CFTC Lies!

    The CFTC Regulations are to protect the US FX trading Public????
    What a joke!
    FX is sucking money away from the US Stock Market.
    Internet accounts opened outside the reach of the IRS means traders get to keep what they make.
    These are the real reasons for regulation.
    Only cry babies who want a Nanny to protect them because they don't know what they are doing and are unwilling to make the effort to learn how to trade effectively need the CFTC Regulations.
     
  6. 4xmets

    4xmets Private

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    I'm not from the US and i don't run any forex business but this is really concerning when you find out that a US institution is suing companies outside of the US just for doing business with people from the US.
    I mean, the US sues a company outside the US and this will be judged by a US court?

    That's why i asked if they're suing the mother company or just the local branch/division.
     
  7. FromAlaska

    FromAlaska Recruit

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    anyone with common sense will agree with you
    1.Well you still can loose all your money trading fx , even with new regulations.
    2.If they really worried about forex traders, they would let those who make money to make more money.
    All these regulations are really for - to make forex undesirable for invesmtent.
     
  8. merlin4x

    merlin4x Banned for uncivilized conduct

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    Well the US successfully forced all Swiss Banks to comply and gave up secret list of US citizens to the IRS.

    Where is EU to protect the Swiss Banks?.... Huh.

    People are losing their pensions on the Wall St. and that is a OK?

    As long as world will rely on the US for money the US will run the show.

    It is that simple.

    And if you will be found guilty there is concentration camp in Guantanamo.
     
  9. toughcookie

    toughcookie Recruit

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    Why should the EU protect them? Switzerland is not part of the EU. In fact, several EU countries including Germany and France also forced Swiss banks to divulge details of their own nationals who were evading taxes.
     
  10. Pharaoh

    Pharaoh Colonel

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    Looks like they want US residents to only be able to trade with brokers registered inside the USA. That will make it so much easier to keep tabs on each and every dollar spent.
     
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