Forex scams on the rise
With a new task force on the beat,
CFTC actions against forex scammers are on the rise in 2009.
By Chris Peters
There has been an uptick in the number of new forex
fraud cases uncovered by the Commodity Futures
Trading Commission (CFTC) so far in 2009. In the first half
of the year, the CFTC has issued orders in approximately 10
cases involving foreign currency fraud.
In August 2008, the CFTC announced the formation of a
retail foreign currency fraud task force, which is charged
with investigating and litigating fraud in the off-exchange
forex market. The announcement came following the
approval of the Food, Conservation, and Energy Act of
2008, which strengthened the
CFTC’s oversight of the offexchange
currency markets and
granted the CFTC rulemaking
authority. It also authorized the
CFTC to bring fraud actions in offexchange
futures transactions and
increased the civil and criminal
penalties for manipulation and false
reporting.
When the task force was
announced, the CFTC said that in
the approximately eight years
between the enactment of the
Commodity Futures Modernization
Act in 2000 and the formation of the
task force in 2008, nearly 100
enforcement actions were filed
against firms and individuals for
fraudulent activities in the forex
market. Those actions resulted in
fines in excess of $560 million and
the restitution of $450 million in
investor losses.
Despite the creation of the task
force, there appears to have been a
lull in enforcement proceedings in
2008, with only three actions taken
against foreign currency scammers
that year. In 2007, 12 actions had
been filed, and there were a total of
seven in 2006. In 2009, however, the
pace has picked up.
With a new task force on the beat,
CFTC actions against forex scammers are on the rise in 2009.
By Chris Peters
There has been an uptick in the number of new forex
fraud cases uncovered by the Commodity Futures
Trading Commission (CFTC) so far in 2009. In the first half
of the year, the CFTC has issued orders in approximately 10
cases involving foreign currency fraud.
In August 2008, the CFTC announced the formation of a
retail foreign currency fraud task force, which is charged
with investigating and litigating fraud in the off-exchange
forex market. The announcement came following the
approval of the Food, Conservation, and Energy Act of
2008, which strengthened the
CFTC’s oversight of the offexchange
currency markets and
granted the CFTC rulemaking
authority. It also authorized the
CFTC to bring fraud actions in offexchange
futures transactions and
increased the civil and criminal
penalties for manipulation and false
reporting.
When the task force was
announced, the CFTC said that in
the approximately eight years
between the enactment of the
Commodity Futures Modernization
Act in 2000 and the formation of the
task force in 2008, nearly 100
enforcement actions were filed
against firms and individuals for
fraudulent activities in the forex
market. Those actions resulted in
fines in excess of $560 million and
the restitution of $450 million in
investor losses.
Despite the creation of the task
force, there appears to have been a
lull in enforcement proceedings in
2008, with only three actions taken
against foreign currency scammers
that year. In 2007, 12 actions had
been filed, and there were a total of
seven in 2006. In 2009, however, the
pace has picked up.