A federal court in Illinois ordered an Australian firm to pay $80,000 for soliciting and accepting foreign currency (forex) orders from U.S. customers without being registered with the Commodity Futures Trading Commission (CFTC). The CFTC said the firm's actions violated provisions of the Dodd-Frank Act and other statutes.
The consent order of permanent injunction, entered Feb. 24 by U.S. District Judge Harry Leinenweber, requires Sydney-based Enfinium Pty. Ltd. to cease and desist from soliciting and accepting orders from U.S. customers who are not Eligible Contract Participants (ECPs) and offering to act as a counterparty to such customers' forex transactions until it has registered with the CFTC. The order directs Enfinium to prominently display a notice on its website that Enfinium does not provide services for U.S. customers.
On Oct. 18 2010, the CFTC adopted new regulations implementing provisions of the Dodd-Frank Act and the 2008 Farm Bill requiring retail foreign exchange dealers to register with the CFTC before soliciting or accepting forex orders from non-ECPs. According to the order, Enfinium solicited and accepted orders from such non-ECPs located in the United States from Oct. 18 2010, to Sept. 7, 2011.
The order finds that Enfinium solicited non-ECP U.S. customers to open forex trading accounts through a website operated by Enfinium's corporate authorized representative, Vantage FX Pty. Ltd., and offered to act as a counterparty to every customer contract. Enfinium stopped accepting U.S. customers after October 18, 2010. However, Enfinium continued to accept orders from U.S. customers who had existing accounts until at least Sept. 7, 2011, according to the order.
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