WASHINGTON DC – Trading Point of Financial Instruments Ltd. (Trading Point), a Cyprus-based firm, has been ordered to pay a $140,000 penalty for illegally soliciting U.S. customers and operating as an unregistered Retail Foreign Exchange Dealer (RFED), the Commodity Futures Trading Commission (CFTC) announced May 1, 2012.
The federal court consent order, entered on April 25, 2012, by Judge John W. Darrah of the U.S. District Court for the Northern District of Illinois, permanently prohibits Trading Point from violating the Commodity Exchange Act (CEA) and CFTC regulations. The company is also required to close all U.S. customer accounts and return all funds to those customers. Additionally, Trading Point must publish a notice on its website stating it no longer serves U.S. clients.
According to the CFTC, between November 2010 and September 2011, Trading Point actively sought orders from U.S. customers with limited financial resources to open leveraged forex trading accounts via its website. By offering to buy and sell forex contracts directly with these customers without proper registration, Trading Point functioned as an RFED.
This action is part of the CFTC’s ongoing efforts to regulate forex firms that unlawfully solicit U.S. customers and operate as RFEDs without registering with the agency. This case represents the second “sweep” targeting such firms. Registered RFEDs and commodity futures brokers are permitted to trade forex with investors who meet specific net worth requirements. Firms targeting non-qualified investors are required to register with the CFTC and adhere to investor protection regulations, including capital requirements and recordkeeping standards.
The CFTC’s Division of Enforcement team, including Jon J. Kramer, Elizabeth M. Streit, Joy McCormack, Scott R. Williamson, Rosemary Hollinger, and Richard B. Wagner, led the investigation.
The CFTC urges the public to verify a company’s registration before investing and provides resources for consumer protection, including information on forex fraud prevention, available on the National Futures Association website at http://www.nfa.futures.org/basicnet.
Source: CFTC.gov
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