CFTC Obtains Default Judgment and Permanent Injunction against ForInvest Group for Violating Multiple CFTC Registration Requirements

ForInvest ordered to pay a $280,000 civil monetary penalty and permanently barred from commodity-related activity.

Washington, DC - The U.S. Commodity Futures Trading Commission (CFTC) today announced that Judge James B. Zagel of the U.S. District Court for the Northern District of Illinois entered a default judgment and permanent injunction against ForInvest Group (aka ForInvests Group LLC) (ForInvest).

The judgment, entered on June 17, 2011, finds that ForInvest solicited clients to open off-exchange leveraged foreign currency (Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term) trading accounts and acted as the counterparty to its customers for all of the forex transactions in these accounts, without being registered as a retail foreign exchange dealer (RFED) with the CFTC. ForInvest has never been registered with the CFTC in any capacity.

The judgment arises from a CFTC complaint filed in the U.S. District Court for the Northern District of Illinois on January 26, 2011 against ForInvest, a Delaware limited liability company, charging it with two registration violations of the Commodity Exchange Act and CFTC regulations. ForInvest was one of 14 foreign currency firms sued by the CFTC in a nationwide sweep of firms allegedly illegally operating without registering with the CFTC (see CFTC Press Release 5974-11, January 26, 2011).

Judge Zagel’s order permanently bars ForInvest from engaging in the illegal conduct charged in the CFTC complaint and orders ForInvest to remove its forex solicitation webpages from the Internet. The order requires ForInvest to pay a $280,000 civil monetary penalty and permanently bars ForInvest from engaging in any commodity-related activity, including trading, and from registering or seeking exemption from registration with the CFTC.

This case is one of the first initiated by the CFTC to enforce new forex regulations that became effective on October 18, 2010. These new regulations require entities that wish to participate in the forex market to register with the CFTC and abide by regulations intended to protect the public.

Grab your latest copy of the Forex Magnates Retail Forex Industry Report for Q1 2011.