InterForex - Another foreign forex broker settles with the CFTC

Similar to FXOpen which settled similar case in January 2012 and unlike InstaTrade and ZTrade who didn't settle but were penalized, InterForex settled the case with CFTC for accepting US 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 traders. InterForex through its lawyer Felix Shipkevich entered into a consent order and was handed a permanent injunction by the CFTC. InterForex is the first firm from the second CFTC's 'sweep' against foreign forex brokers accepting US clients.

Although CFTC doesn't really have any authority against foreign companies settlement in such case is an interest of both parties as CFTC can't actually reach them in any other way and the sued brokers would like to put this matter behind them for various reasons. Such reasons can be the interest of owners and directors to travel in the US or if the firm is undergoing regulatory proceedings in another jurisdiction and would like to present a clean sheet to the regulator.

Full Order document here.

Washington, DC - The U.S. Commodity Futures Trading Commission (CFTC) obtained a federal court consent order that permanently bars defendant InterForex, Inc., of Tortola, British Virgin Islands, from soliciting or accepting orders to trade foreign currency (forex) from U.S. customers who are not Eligible Contract Participants (ECPs). The order also permanently bars InterForex from offering to be the counterparty to U.S. customers’ forex transactions, without registering with the CFTC.

The order, entered on February 2, 2012, by Judge Rebecca R. Pallmeyer of the U.S. District Court for the Northern District of Illinois, also requires InterForex to prominently display a notice on its website that InterForex does not provide services for U.S. customers.

The order settles CFTC charges that InterForex unlawfully solicited U.S. customers to engage in forex transactions and operated as a Retail Foreign Exchange Dealer (RFED) without being registered with the CFTC (see CFTC Press Release 6108-11, September 8, 2011).

Specifically, the order finds that between October 18, 2010, and September 8, 2011, InterForex solicited orders from U.S. customers who were not ECPs to open leveraged Forex Trading Forex Trading Forex trading is the buying and selling of foreign currencies with the aim of generating a profit. The value of currencies, especially floating currencies, fluctuate to varying degrees. This constant volatility of exchange rates opens the door for speculators to invest in a certain currency against another. The Forex market is the world’s biggest and most liquid market, with over $5 billion turnover every single day, with the market being open 24 hours a day, 5 days a week.It goes without saying Forex trading is the buying and selling of foreign currencies with the aim of generating a profit. The value of currencies, especially floating currencies, fluctuate to varying degrees. This constant volatility of exchange rates opens the door for speculators to invest in a certain currency against another. The Forex market is the world’s biggest and most liquid market, with over $5 billion turnover every single day, with the market being open 24 hours a day, 5 days a week.It goes without saying Read this Term accounts through its website. During the period, InterForex’s website did not impede U.S. residents from applying for forex accounts; however, InterForex did not accept orders from any U.S. customers, according to the order. The order finds that InterForex acted as an RFED by offering to take the opposite side of retail customers’ forex transactions (i.e., offered to act as a counterparty) without being registered as an RFED and also solicited U.S. customers to open a variety of forex trading accounts without being registered, in violation of the Commodity Exchange Act (CEA) and applicable CFTC regulations.