May 1, 2012
Federal Court in Illinois Orders Trading Point of Financial Instruments Ltd. to Pay $140,000 Penalty for Acting as Unregistered Retail Forex Dealer
Trading Point also ordered to cease soliciting U.S. customers and to modify website
Action part of CFTC’s second nationwide sweep against forex 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 Trading Point of Financial Instruments Ltd. (Trading Point), of Limassol, Cyprus, to pay a $140,000 civil monetary penalty to settle CFTC charges. The order finds that Trading Point 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.
The consent order, entered April 25, 2012, by Judge John W. Darrah of the U.S. District Court for the Northern District of Illinois, permanently bars Trading Point from engaging in any conduct that violates the Commodity Exchange Act (CEA) and CFTC regulations, as charged. The order also requires Trading Point to close all U.S. customer accounts and to return each U.S. customer all funds in the customer’s account. It also directs Trading Point to publish a prominently displayed notice on its website, stating that Trading Point does not provide services for U.S. customers.
The order finds that between November 2010 and September 2011, Trading Point solicited orders from low net worth U.S. customers to open leveraged forex trading accounts through its website. The order finds that Trading Point 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.
The order settles CFTC charges brought against Trading Point as part of the CFTC’s second “sweep” against forex firms for unlawfully soliciting U.S. customers to engage in forex transactions and operating as RFEDs without being registered with the CFTC (see CFTC Press Release 6108-11, September 8, 2011).
In the forex market, RFEDs and some registered commodity futures brokers may buy forex contracts from, or sell forex contracts to, individual investors who possess sufficient net worth to qualify as eligible contract participants (ECPs). Firms that market forex contracts to customers who are not eligible ECPs 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.
CFTC Division of Enforcement staff members responsible for this case are Jon J. Kramer, 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 Advisories on Forex Fraud
If it sounds too good to be true, it probably is!
Fraud Advisory from the CFTC: Foreign Currency Trading (Forex) Fraud
Last Updated: May 1, 2012