The following is from the CFTC...
The U.S. Commodity Futures Trading Commission (CFTC) today announced that it filed a complaint in the U.S. District Court for the Northern District of Illinois against Halifax Investment Services, Ltd. (Halifax) of Sydney, Australia for soliciting and accepting foreign currency (forex) orders from U.S. customers without registering with the CFTC as required.
In the forex market, entities known as Retail Foreign Exchange Dealers (RFEDs) may buy foreign currency contracts from, or sell foreign currency contracts to, individual investors. Under the Commodity Exchange Act (CEA) and CFTC regulations, since October 18, 2010, with a few exceptions, an entity acting as an RFED that solicits or accepts orders from U.S. customers in connection with forex transactions must register with the CFTC and abide by rules and regulations designed for investor protection, including those relating to minimum capital requirements, recordkeeping, and compliance (see the CFTC’s Forex Currency Trading page).
According to the CFTC complaint, Halifax acts as an RFED and knowingly solicits or accepts orders from non-eligible contract participants (non-ECPs) located in the U.S. without being registered with the CFTC as an RFED. Among other things, the complaint states that Halifax operates a website that permits U.S. customers to open trading accounts by submitting online account applications, and that nothing in Halifax’s online account application states that Halifax does not accept U.S. customers or precludes non-ECPs from opening forex accounts with Halifax.
In its continuing litigation, the CFTC seeks a permanent injunction preventing Halifax from soliciting U.S. customers to buy or sell foreign currency contracts and from operating its website unless and until it complies with the CEA and CFTC regulations, as charged. The complaint also seeks civil monetary penalties, trading and registration bans, disgorgement, and rescission.
The CFTC strongly urges the public to check with the National Futures Association (NFA) whether a company is registered before investing funds. If a company is not registered, an investor should be wary of providing funds to that company.
For information on finding a company’s registration status, see the CFTC’s Education Center, Registration of Intermediaries webpage.
The CFTC also strongly urges members of the public to visit the CFTC’s Customer Protection webpage and to review the following CFTC Customer Fraud Awareness and Prevention Advisories, before investing money in the forex market:
CFTC Consumer Advisory: Forex Fraud: If it sounds too good to be true, it probably is!
Fraud Advisory from the CFTC: Foreign Currency Trading (Forex) Fraud
Foreign Exchange Currency Fraud: CFTC/NASAA Investor Alert
The CFTC Division of Enforcement staff members responsible for this action are David Terrell, Joy McCormack, Elizabeth Streit, Rosemary Hollinger, Scott R. Williamson, and Richard Wagner.