Hi everyone

I just had a nice conversation over the e-mail with Elan Mendel, Associate at THE SHIPKEVICH LAW FIRM, to update me about the situation of the suit by the CFTC against 14 Forex Brokers in the US announced last January 26th 2010.

Elan told me that as of yesterday, none of the 14 firms has formally responded to the lawsuits against them yet. Only one company, FX Price, has reached an agreement with the CFTC to cease and desist pending resolution of the lawsuit. Wall Street Brokers was supposed to appear in court on February 2nd, but did not.

Curious… very curious…

Francesc

CFTC Sues 14 FX Entities for Failure to Register
By THE SHIPKEVICH LAW FIRM

The U.S. Commodity Futures Trading Commission (“CFTC”) announced on January 26, 2011 that it filed 14 enforcement actions in Federal District Courts in Chicago, the District of Columbia, Kansas City and New York.

In all but two of the complaints, the CFTC alleged that defendants acted as a retail foreign exchange dealer (“RFED”), offering to take or taking the opposite side of a customer’s forex transaction, without being registered with the CFTC. In the remaining two complaints against ZtradeFX LLC and FXPRICE LLC, the CFTC contended that the firms solicited customers to place forex trades without being registered as an introducing broker. The CFTC is now seeking an injunction to prevent the entities from operating until they comply with the regulations, as well as civil monetary penalties, trading and registration bans, and other relief.

The Dodd-Frank financial-regulation law enacted in July 2010 directs the CFTC and the Securities and Exchange Commission to regulate the foreign exchange industry. Under the Act and the Regulations, an entity acting as an RFED or futures commission merchant (“FCM”) 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.

Each defendant has twenty-one days from the time it is served with the complaint to file an answer. As of February 15, 2011, none of these defendants has formally responded to the complaint against them. A hearing was held on February 2nd on the CFTC’s request for a preliminary injunction restraining Wall Street Brokers, LLC from engaging in any transactions that violate the Commodities Exchange Act. Wall Street Brokers failed to appear at the hearing and a preliminary injunction was subsequently issued against them. A similar injunction was issued against FXPRICE, on consent.