June 5, 2017
CFTC Charges Estonian Company Tallinex with Fraud and Failure to Register as a Retail Foreign Exchange Dealer and Nevada Company General Trader Fulfillment with Failure to Register as an Introducing Broker
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced the filing of a civil enforcement action in the U.S. District Court for the District of Utah against Tallinex a/k/a Tallinex Limited (Tallinex), of Tallinn, Estonia, and General Trader Fulfillment (GTF), a Nevada company doing business in Pleasant Grove, Utah. The CFTC’s Complaint charges Tallinex with operating as a Retail Foreign Exchange Dealer (RFED), without being registered as such with the CFTC, and with fraudulently soliciting U.S. resident customers to trade leveraged foreign currencies (forex). The Complaint charges GTF with acting as an unregistered Introducing Broker (IB) by soliciting U.S. customers to open forex trading accounts with Tallinex.
Specifically, from at least September 2012 and continuing to at least September 2016, Tallinex fraudulently solicited and accepted at least $1.5 million from U.S. customers in connection with leveraged or margined forex transactions, to which it was or offered to be the counterparty. Moreover, according to the Complaint, in the course of soliciting retail forex customers, Tallinex made fraudulent misrepresentations and omissions of material fact and engaged in fraudulent and deceptive business practices. For example, Tallinex allegedly defrauded its U.S. customers by 1) falsely representing that Tallinex was lawfully doing business in the United States, 2) misrepresenting and omitting the likelihood of profit
s and risk of loss involved in trading their forex contracts, and 3) misrepresenting the safety of customer funds in the event of Tallinex’s financial collapse (i.e., counterparty risk).
According to the Complaint, Tallinex also operates an introducing broker program whereby GTF, and companies similar to GTF, introduce trading accounts to Tallinex and receive commissions on revenue generated by the accounts’ trading activity.
In its continuing litigation, the CFTC seeks restitution to defrauded customers, disgorgement of ill-gotten gains, a civil monetary penalty, permanent registration and trading bans, and a permanent injunction against future violations of federal commodities laws, as charged.
CFTC Division of Enforcement staff members responsible for this case are Camille M. Arnold, Melissa Cavers, Joy McCormack, David Terrell, Scott Williamson, and Rosemary Hollinger.
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CFTC’s Foreign Currency (Forex) Fraud Advisory
The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Foreign Currency Trading (Forex) Fraud Advisory, which states that the CFTC has witnessed a sharp rise in Forex trading scams in recent years and helps customers identify this potential fraud.
Customers can report suspicious activities or information, such as possible violations of commodity trading laws, to the CFTC Division of Enforcement via a Toll-Free Hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online.
Last Updated: June 5, 2017