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Regulator sues foreign currency dealers

  • #1
  • First Post: Jan 26, 2011 9:12pm Jan 26, 2011 9:12pm
NEW YORK (CNNMoney) -- The U.S. Commodity Futures Trading Commission filed suit Wednesday against 14 foreign exchange dealers it alleges were engaged in illegal currency trading.


The filings are the first flexing of new regulatory muscle afforded the agency under provisions of the Dodd-Frank Wall Street reform bill and the 2008 Farm Bill that went into effect in October.



The suits allege that the firms illegally solicited members of the public to engage in foreign currency transactions, and that they operated without being registered with the CFTC.



More here http://money.cnn.com/2011/01/26/news...oogle_business

 

  1. EuroForex Development LLC, a Delaware LLC
  2. FIG Solutions Limited, Inc., a Delaware corporation
  3. ForInvest, a Delaware corporation
  4. FXOpen Investments Inc., a Delaware LLC
  5. FXPRICE, a Delaware LLC
  6. GIGFX, L.L.C., a Delaware company
  7. InovaTrade, Inc., a company with purported offices in Florida
  8. InstaTrade Corporation or InstaForex, a British Virgin Islands company
  9. InvesttechFX Technologies, Inc., a Canadian corporation located in Toronto
  10. J&K Futures, Inc., a company with purported offices in California and New York
  11. Kingdom Forex Trading and Futures, Ltd., a Nevada company
  12. Prime Forex, LLC, a Delaware LLC
  13. Wall Street Brokers, LLC, a Delaware LLC
  14. ZtradeFX LLC, a Connecticut LLC

  • #2
  • Jan 27, 2011 8:09am Jan 27, 2011 8:09am
So being a member of FXOpen, how will this affect me? At least I don't have a lot of money in their account, but still. They definitely ain't getting more! Fuckers! In fact, it's probably time to find a new broker.
  • #3
  • Jan 27, 2011 8:19am Jan 27, 2011 8:19am
Although I haven't read much about this, it might be a good time to start a list of non-US brokers who plan to close US accounts in June of this year rather than challenge and/or ignore the CFTC.
  • #4
  • Jan 27, 2011 8:22am Jan 27, 2011 8:22am
Quoting swamper
Although I haven't read much about this, it might be a good time to start a list of non-US brokers who plan to close US accounts in June of this year rather than challenge and/or ignore the CFTC.

That is easy, they all should. The CFTC is pretty clear about that and could easily go after their liquidity providers so why would a reputable non US regulated non US broker even contemplate risking this.

The only non US brokers that will accept you without being regulated should be the first to be avoided. Why would you even risk your hard earned cash? Stick to either a US regulated broker or a bank (they are exempt)
  • #5
  • Jan 27, 2011 8:26am Jan 27, 2011 8:26am
Quoting PiptheRipper
So being a member of FXOpen, how will this affect me? At least I don't have a lot of money in their account, but still. They definitely ain't getting more! Fuckers! In fact, it's probably time to find a new broker.

Why even contemplate trading with an unregulated broker. Why do retailers continue to risk their cash?
  • #6
  • Jan 27, 2011 8:30am Jan 27, 2011 8:30am
Quoting cloggie
That is easy, they all should. The CFTC is pretty clear about that and could easily go after their liquidity providers so why would a reputable non US regulated non US broker even contemplate risking this.

The only non US brokers that will accept you without being regulated should be the first to be avoided. Why would you even risk your hard earned cash? Stick to either a US regulated broker or a bank (they are exempt)
From everything I've read, the CFTC might not have as much power/influence as it would like us to believe, especially when it comes to offshore companies. Regardless of this, I'm sure that many non-US brokers already have a plan in place as far as US accounts. A list of some sort would prevent traders from opening soon-to-be-closed accounts.
  • #7
  • Jan 27, 2011 8:33am Jan 27, 2011 8:33am
Quoting swamper
From everything I've read, the CFTC might not have as much power/influence as it would like us to believe, especially when it comes to offshore companies. Regardless of this, I'm sure that many non-US brokers already have a plan in place as far as US accounts. A list of some sort would prevent traders from opening soon-to-be-closed accounts.

You are missing the point, you will have zero recourse, if you ever get in a dispute with your broker, the broker will not be inclined to help you.

Agreeing or disagreeing with the law is irrelevant, it is in place, skirt it and avoid it at your own risk.

The framework is in place, work with it. The only way around it is trade with a bank or set up a legal offshore structure.
  • #8
  • Jan 27, 2011 8:42am Jan 27, 2011 8:42am
Quoting cloggie
You are missing the point, you will have zero recourse, if you ever get in a dispute with your broker, the broker will not be inclined to help you.

Agreeing or disagreeing with the law is irrelevant, it is in place, skirt it and avoid it at your own risk.

The framework is in place, work with it. The only way around it is trade with a bank or set up a legal offshore structure.
I'm not sure about that. Are you suggesting that a regulated offshore broker (British or Swiss for instance) that holds US accounts will be permitted by the regulatory body of its home country to ignore its own regulations because the account holder is a US citizen?
  • #9
  • Jan 27, 2011 8:56am Jan 27, 2011 8:56am
No proper foreign regulated broker is going to accept you as a client, so the only broker you will be able to find are the dodgy ones, and that is what I am trying to tell you here. All the properly regulated foreign brokers that are not US regulated have already told their US based clients to close their accounts, the dodgy ones will be happy to accept your cash.

Knock yourself out. Don't let me get in your way. Just don't come back here in a few months complaining that you got scammed by some broker.
  • #10
  • Edited Jan 28, 2011 7:07am Jan 27, 2011 8:59am | Edited Jan 28, 2011 7:07am
Quoting cloggie
No proper foreign regulated broker is going to accept you as a client, so the only broker you will be able to find are the dodgy ones, and that is what I am trying to tell you here. All the properly regulated foreign brokers that are not US regulated have already told their US based clients to close their accounts, the dodgy ones will be happy to accept your cash.

Knock yourself out. Don't let me get in your way.
http://forums.babypips.com/rate-my-b...e-cftc-51.html
  • #11
  • Jan 27, 2011 9:03am Jan 27, 2011 9:03am
Quoting swamper
What do you think about this list?
http://forums.babypips.com/rate-my-b...e-cftc-48.html

Glanced through it briefly, but it validates exactly what I was saying, all the European brokers accepting US clients are banks and are exempt, there is not a single regulated European broker accepting US clients on that list. What does that tell you?

This thread is not about agreeing with the CFTC or not, it is about the CFTC suing a slew of dodgy brokers and our discussion about skirting the laws.

Do yourself a favour and don't ty to circumvent the CFTC, it will only end up in tears.

From where I am sitting, there is nothing wrong with the CFTC rules, 50:1 is still excessive, no hedging is pretty obvious and FIFO is used by anyone with half a brain.
  • #12
  • Jan 27, 2011 9:41am Jan 27, 2011 9:41am
Quoting PiptheRipper
So being a member of FXOpen, how will this affect me? At least I don't have a lot of money in their account, but still. They definitely ain't getting more! Fuckers! In fact, it's probably time to find a new broker.
If you are a US citizen I would say it's time to get the hell outa dodge. Withdraw and move your money to one of those lovely no hedging, fifo, 1:50 max leverage US based, CFTC registered brokers.

If you are not in the US, you can stay put. It doesn't affect you.
  • #13
  • Jan 27, 2011 10:02am Jan 27, 2011 10:02am
dunno how this affects fxopen's clients at all.
  • #14
  • Jan 27, 2011 10:02am Jan 27, 2011 10:02am
Quoting oakmonster
If you are a US citizen I would say it's time to get the hell outa dodge. Withdraw and move your money to one of those lovely no hedging, fifo, 1:50 max leverage US based, CFTC registered brokers.

If you are not in the US, you can stay put. It doesn't affect you.
Thank you. I'm not aware of all the rules and regulations, which is a bad thing thing I know since my cash is on the line. I guess I just haven't worried that much since it's only a small micro account.

I'm not a US citizen. I'm South African, but I've lost trust in my broker now that I now that they are disobeying the rules.

I'll have to do some research, since I don't know much on the subject.
  • #15
  • Jan 27, 2011 10:03am Jan 27, 2011 10:03am
Quoting cloggie
Why even contemplate trading with an unregulated broker. Why do retailers continue to risk their cash?
but you can't say fxopen are thieves man.
  • #16
  • Jan 27, 2011 10:04am Jan 27, 2011 10:04am
Quoting oakmonster
If you are a US citizen I would say it's time to get the hell outa dodge. Withdraw and move your money to one of those lovely no hedging, fifo, 1:50 max leverage US based, CFTC registered brokers.

If you are not in the US, you can stay put. It doesn't affect you.
My original thought, which had nothing to do with my situation, was that there will be non-US brokers (good or not, regulated or not), and perhaps a few non-US banks from what I've read, that have decided or will decide to close US accounts this June. Knowing who they are would save people time and maybe even money.
  • #17
  • Jan 27, 2011 2:33pm Jan 27, 2011 2:33pm
Quoting cloggie
Why even contemplate trading with an unregulated broker. Why do retailers continue to risk their cash?
Its not necessarily about trading with a non-regulated broker, but just one that isnt regulated by the CFTC.

I am actually quite surprised that the CFTC have actually done something about this so soon after the rules cam into place. I bet the brokers that did stop accepting US clients and took a load of abuse feel somewhat vindicated now!
  • #18
  • Last Post: Jan 27, 2011 3:02pm Jan 27, 2011 3:02pm
Quoting PiptheRipper
I'm not a US citizen.
Good. Otherwise you would be fucked financially by the US government. Every forex trasaction carried out by CFTC-regulated broker will be taxed and the beneficiary is going to by CFTC.


Quoting PiptheRipper
I'm South African, but I've lost trust in my broker now that I now that they are disobeying the rules.
Your trust should rather be high for the broker who DISOBEYED... and has guts to fight.

Are you gutless or what? Are you a monkey? Are you a slave? What are you that the you prize the 'virtue' of obeying so much???
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