Chicago, IL – On April 25, 2014, Judge James B. Zagel of the U.S. District Court for the Northern District of Illinois issued a permanent injunction against Halifax Investment Services, Ltd., barring the Australian firm from soliciting forex trades from unqualified U.S. residents. The order stems from charges brought by the U.S. Commodity Futures Trading Commission (CFTC) alleging unlawful solicitation and operation as an unregistered Retail Foreign Exchange Dealer (RFED).
According to the CFTC, between October 18, 2010, and February 5, 2013, Halifax maintained a website that allowed U.S. residents not meeting the criteria of “eligible contract participants” to apply for leveraged forex trading accounts. This activity violated regulations requiring RFEDs and Futures Commission Merchants (FCMs) to register with the CFTC and adhere to investor protection rules, including capital requirements and recordkeeping.
The consent order mandates that Halifax publish a notice on its website explicitly stating it does not provide services to U.S. residents. The CFTC initially filed charges in February 2013, outlining Halifax’s failure to register while actively soliciting public forex transactions.
The CFTC emphasizes the importance of verifying a firm’s registration status before investing through the National Futures Association (NFA) website at www.nfa.futures.org/basicnet. Investors are cautioned against providing funds to unregistered companies.
David Terrell, Elizabeth Streit, Joy McCormack, Scott Williamson, Rosemary Hollinger, and Rick Glaser of the CFTC’s Division of Enforcement led the investigation. The case was filed in Illinois and settled through the consent order.
Penalties associated with the settlement primarily involve the injunction and mandated website notice, rather than a monetary fine. The CFTC’s action aims to prevent future violations and protect U.S. investors from unregistered forex dealers.
Source: CFTC.gov
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