CFTC Sues FXOpen and 13 Other Forex Firms

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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!

Filed under Regulation by  #

Comments on CFTC Sues FXOpen and 13 Other Forex Firms Leave a Comment

February 5, 2011

pigsinablanket @ 3:41 am #

There is a thing called civil disobedience. What we do is as a group go to off shore brokers openly and become affiliates for them. Im looking at the wording and trying to find the difference between an affiliate and an IB. But my guess is if you just have a banner on your website are you advertising or soliciting? Two very different things. But I am interested on peoples take as to where is the line from being an IB as opposed to an affiliate. IN the meantime I suggest civil disobedience. Take your money off shore even if the rules do not change your way of trading. I personally don't care too much about the leverage but FIFO just plain sucks.

Why is the CFTC SUING those companies? Simple……
There is no LAW so they are TRYING TO SET PRECEDENCE!

I'm no lawyer but if these brokers were actually breaking laws they would be TRIED in a court of law and fined and imprisoned not SUED. WHEN YOU ARE sued THERE HAS TO BE AN INJURED PARTY. WHO IS THE INJURED PARTY?!!!!
The whole thing stinks. They are using the courts again to circumvent the laws

Fully Informed Jury Association
Fully Informed Jury Association. A non profit organization
This is our last stand against a Government gone wild.

March 21, 2011

Damon @ 11:02 am #

Wow, you assholes (UK, US) asked for it I guess. I was in forums screaming about not creating a regulatory body and imbuing them with any legal powers… But, alas, history repeats itself. Couple bad apple brokerages take some piss ants $50 bucks and they scream for blood. Then more sympathetic morons scream "Justice!" Then we create a group that turns around and jail rapes everyone across the boards.

History people, how many times must it repeat before you remember to take some F-ing responsibility for your own actions… YOU PICKED THE BROKERAGE THAT SCREWED YOU IN THE FIRST PLACE. The lesson is even in Star Wars for christ sakes. The emperor… anyone? Never mind.

-Jim, I'll stay in my "dodgy offshore brokerage" that allows me to trade properly, is an STP broker, (not your crap "legal" bucket shops) and actually services the customer…. And for anyone else, good brokerages are not hard to find, all you need to do is "research" if you knew what "responsibility" meant you would have heard of the word. You won't find them in the States or in the UK anymore thanks to CFTC and #@($ing FIFO!

Here is how you ACTUALLY TAKE RESPONSIBILITY INSTEAD OF SHOOTING YOURSELF IN THE FACE… for next time… just in case: http://www.truefx.com/?page=partners

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