March 12, 2012
Federal Court in Illinois Orders City Credit Capital, (UK) Ltd. to Pay $140,000 Civil Monetary Penalty for Acting as Unregistered Retail Forex Dealer
City Credit Capital also ordered to cease soliciting U.S. customers and to modify website
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) obtained a federal court consent order requiring City Credit Capital, (UK) Ltd. (City Credit), of London, U.K., to pay a $140,000 civil monetary penalty to settle CFTC charges. The order finds that City Credit unlawfully solicited U.S. customers 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 6108-11, September 8, 2011).
The consent order, entered on March 7, 2012, by Judge Ruben Castillo of the U.S. District Court for the Northern District of Illinois, permanently bars City Credit from engaging in any conduct that violates the Commodity Exchange Act (CEA) and CFTC regulations, as charged. The order also directs City Credit to publish a prominently displayed notice on its website stating that City Credit does not provide services for U.S. customers.
In the forex market, RFEDs and some registered commodity futures brokers may buy forex contracts from, or sell forex contracts to, individual investors who do not possess sufficient net worth to qualify as eligible contract participants (ECPs). These firms are required to register with the CFTC and abide by rules and regulations designed for investor protection, including those relating to minimum capital requirements, recordkeeping, and compliance.
Specifically, the order finds that beginning on October 18, 2010, to October 21, 2011, City Credit solicited orders from low net worth (non-ECPs) U.S. customers to open leveraged forex trading accounts through its website. The order finds that City Credit acted as an RFED by offering to be, and acting as, a counterparty buying and selling forex contracts with U.S. customers without being registered as an RFED. According to the order, City Credit liquidated all of its U.S. customers’ accounts, and no U.S. customers have any open accounts at City Credit.
The CFTC appreciates the assistance of the United Kingdom Financial Services Authority (FSA).
CFTC Division of Enforcement staff responsible for this case are Susan B. Padove, Elizabeth M. Streit, Joy McCormack, Scott R. Williamson, Rosemary Hollinger, and Richard B. Wagner.
CFTC customer protection information for retail forex customers
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 on the National Futures Association’s website at http://www.nfa.futures.org/basicnet.
Before investing money in the forex market, the CFTC also strongly urges members of the public to review the CFTC’s forex consumer protection advisories listed below.
CFTC Consumer Advisory Forex Fraud
If it sounds too good to be true, it probably is!
Fraud Advisory from the CFTC: Foreign Currency Trading (Forex) Fraud
Foreign Exchange Currency Fraud: CFTC/NASAA Investor Alert
Last Updated: March 12, 2012