FXOpen Fined 140k for Being Unlicensed RFED

Discussion in 'Forex Brokers' started by cstfx, Jan 5, 2012.

  1. cstfx


    Illinois Federal Court Imposes $140,000 Civil Monetary Penalty on Foreign Currency Firm, FXOpen Investments Inc., for Acting as an Unregistered Retail Foreign Exchange Dealer
    Action part of CFTC’s nationwide sweep against foreign currency firms for failure to register under the 2008 Farm Bill, the Dodd-Frank Act, and CFTC regulations

    Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) has obtained a federal court consent order requiring defendant FXOpen Investments Inc. (FXOpen), a foreign firm, to pay a $140,000 civil monetary penalty to settle CFTC charges that it illegally solicited members of the public to engage in foreign currency (forex) transactions and operated as a Retail Foreign Exchange Dealer (RFED) without being registered with the CFTC (see CFTC Press Release 5974-11, January 26, 2011).

    The order, entered on December 22, 2011 by Judge Virginia M. Kendall of the U.S. District Court for the Northern District of Illinois, also orders FXOpen to close all U.S. customer accounts and return U.S. customer funds. The order also permanently bars FXOpen from engaging in any conduct that violates the Commodity Exchange Act (CEA) and CFTC regulations.

    Specifically, the order finds that between October 18, 2010, and January 26, 2011, FXOpen acted as an RFED by taking or offering to take the opposite side of customers’ forex transactions without being registered as an RFED, which is in violation of CFTC regulations. The order also finds that during the same time period, FXOpen solicited or accepted customer orders to place forex trades without being registered, which is in violation of the CEA.

    In the forex market, entities known as RFEDs or Futures Commission Merchants (FCMs) may buy forex contracts from, or sell forex contracts to, individual investors. Under the CEA and CFTC regulations, an entity acting as an RFED or FCM must register with the CFTC and abide by rules and regulations designed for investor protection, including those relating to minimum capital requirements, recordkeeping, and compliance. 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.

    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: http://www.nfa.futures.org/basicnet.

  2. Go CFTC. Who cares about Corzine, TBTF banks gone wild, Fannie, Freddie or infinite ZIRP. I'm just glad Joe Sixpack can't open an a $300 micro-mini account with FXOpen and put the world economy at risk.
  3. Right.

    Of course the CFTC forced many U.S. forex traders who were using safe fully segregated London forex brokers to switch to U.S. brokers where there is either no segregation (many U.S. forex brokers) or inadequate segregation (MF Global).
  4. How can the CFTC have any jurisdiction over a foreign firm? How can the CFTC stop US Residents from investing globally?

    I just do not get this...How can the American people allow an Obama run wild?

  5. CFTC & SEC needs to be leveled. Build a park in their spot. Much safer.