CHICAGO, IL – Windsor Brokers, Ltd., a Cyprus-based firm, has been ordered to pay a $140,000 penalty for illegally soliciting U.S. customers to trade foreign currency (forex) without proper registration, the U.S. Commodity Futures Trading Commission (CFTC) announced March 7, 2012.
The federal court consent order, entered on March 6, 2012, by Judge Elaine E. Bucklo of the U.S. District Court for the Northern District of Illinois, permanently prohibits Windsor Brokers from violating the Commodity Exchange Act (CEA) and related CFTC regulations. The company is also required to prominently display a notice on its website stating it no longer serves U.S. customers.
According to the CFTC, Windsor Brokers operated as an unregistered Retail Foreign Exchange Dealer (RFED) between October 18, 2010, and November 30, 2011. RFEDs, which facilitate forex transactions for individual investors who do not meet certain net worth requirements, are mandated to register with the CFTC and adhere to specific investor protection rules.
The investigation revealed Windsor Brokers actively solicited orders from U.S. investors with limited financial resources through its website, offering leveraged forex trading accounts. The company acted as a counterparty in forex contracts without being properly registered as an RFED.
The CFTC confirmed that Windsor Brokers has since liquidated all U.S. customer accounts and currently has no open accounts within the United States.
The CFTC acknowledged the cooperation of Germany’s Bundesanstalt für Finanzdienstleistungsaufscicht (BaFin) and the Securities and Exchange Commission for the Republic of Cyprus (CySEC) in the investigation.
The case was led by CFTC staff members Susan B. Padove, Elizabeth M. Streit, Joy McCormack, Scott R. Williamson, Rosemary Hollinger, and Richard B. Wagner.
Source: CFTC.gov
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