Unregistered Forex Brokers Sued by CFTC

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The CFTC made a major move against unregistered forex brokers – they sued no less than 14 brokers. Lawsuit were filed in 4 different courts across the US.  Here are the names of the companies:

  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 d/b/a 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; and
  14. ZtradeFX LLC, a Connecticut LLC.

Bloomberg reports that the CFTC is seeking an injunction to stop the firms from operating until they comply with the regulations.  Are you a client of one of these firms?

In 12 complaints, the allegations show that the companies worked as forex brokers and took the opposite side of the client’s transactions. In two other ones, against ZtradeFX LLC and FXPRICE, the firms have just operated as unregistered forex brokers.

It’s interesting to see that also FXOpen, that also has an ECN model is also in the list of companies that were sued for working against the forex traders.

The CFTC definitely works hard to fight problematic forex brokers. There’s a lot of doubt about whether some of its rules, such as the leverage limit, protect forex traders.

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About Author

Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned the significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.

7 Comments

  1. Thanks for this information. It is high time that the dishonest bastards who invaded forex should be brought to heel.

  2. Pingback: Forex Place - Seizure Order Against IT for Allegedly Stealing | Forex Crunch

  3. As long they pay me if I’m gonna withdraw that all that matter. Whoever take my took my opposite side of the trade doesn’t matter either. So gtfo CFTC.

  4. I have been trading and have spoken with many people who trade with FXOpen. This is an excellent company. I would put them on par with FXCM(also traded with them), or any other major US brokerage. What is actually going on is the CFTC is making a play to get a law president in place that allows them to tell USA citizens that they cannot take their business outside the US.

    For those that don’t know much about the inner workings of a forex broker, essentially every trade that anyone ever does is always hedged. Most often the hedged position is from another trader who is using the same brokerage but has taken an opposing direction. When there is no opposing contract available, the broker uses their own money to take the opposing position. This effectively reduces the financial risk to the brokerage and keeps them from going bankrupt. It is far more complex than laid out here, but that is a quick explaination.

    SO…NO MATTER WHAT, you can rest assured that your broker is taking up opposing positions to some of your orders. That is just the way the system works.

    What is a problem is when a broker stop hunts. They are basically taking advantage of you in those situations. Now…i could rave about how I have lost money and I was certain that the market was going to do..blah,blah,blah…BUT, that is the forex market. It is by nature, unpredictable and volatile. I have yet to find any situation where FXOpen was doing any subversive activity. There has been a few time that the market unexpectedly broke out against my position after i entered an order. But, in EVERY INSTANCE it was always a legitimate market move.

    I sincerely hopes that the CFTC does not get its way here. If it does, I feel sorry for all US based traders that are not already rich. With the current impositions from the CFTC, it is obvious that the primary intent is to keep poor people poor.