CFTC Sues FXOpen and 13 Other Forex Firms
We've previously pondered how the CFTC might go about enforcing the new forex trading regulations that came into force last October, and now we know one of the tactics they are going to employ. Yesterday the CFTC issued a press release announcing that:
It simultaneously filed 13 enforcement actions in Federal District Courts in Chicago, the District of Columbia, Kansas City and New York, alleging that 14 entities are illegally soliciting members of the public to engage in foreign currency (forex) transactions and that they are operating without being registered with the CFTC.
That list includes 12 RFEDs, the most prominent of which is FXOpen, plus two introducing brokers, all of which the CFTC alleges:
Solicited or accepted orders from US investors to enter into forex transactions in violation of the [Commodity Exchange] Act.
The complaints themselves are all against entities that allow US residents to open accounts, and that also have US offices and/or phone numbers, or US hosted websites and/or trading servers. Apart from requesting that the courts stop the assorted defendants from soliciting US forex traders without being registered, the CFTC also "seeks civil monetary penalties". I'm no lawyer, but it sounds to me as though the CFTC are asking for up to $140,000 per day since last October, plus costs, plus further relief!
It will be very interesting to see how all these cases progress, particularly the ones against entities located outside the US, in jurisdictions such as Canada, the British Virgin Islands, Mauritius and Panama!
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