The U.S. Commodity Futures Trading Commission (CFTC) filed a complaint on February 5, 2013, in the U.S. District Court for the Northern District of Illinois against Halifax Investment Services, Ltd., a company based in Sydney, Australia. The complaint alleges that Halifax engaged in forex fraud by soliciting and accepting orders from U.S. customers without proper registration with the CFTC.
According to the CFTC, Halifax operates as a Retail Foreign Exchange Dealer (RFED), buying and selling foreign currency contracts to individual investors. Since October 18, 2010, the Commodity Exchange Act (CEA) and CFTC regulations require RFEDs soliciting U.S. customers to register with the CFTC and adhere to specific investor protection rules, including capital requirements and recordkeeping.
The complaint asserts that Halifax knowingly solicited orders from non-eligible contract participants (non-ECPs) in the U.S. without being a registered RFED. Halifax allegedly maintains a website allowing U.S. customers to open trading accounts via online applications, with no disclosures indicating a restriction on U.S. customers or preventing non-ECPs from opening accounts.
The CFTC is seeking a permanent injunction to prevent Halifax from soliciting U.S. customers and operating its website until it complies with the CEA and CFTC regulations. Additionally, the agency seeks civil monetary penalties, trading and registration bans, disgorgement of ill-gotten gains, and rescission of contracts. The CFTC urges investors to verify a company’s registration status with the National Futures Association (NFA) before investing any funds.
The case is being pursued by CFTC staff members David Terrell, Joy McCormack, Elizabeth Streit, Rosemary Hollinger, Scott R. Williamson, and Richard Wagner.
Source: CFTC.gov
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