CFTC files fraud charges against Tallinex for illicit Forex trading


The U.S. Commodity Futures Trading Commission, CFTC said it has filed fraud charges against Tallinex.

Tallinex is an Estonian Retail Foreign Exchange Dealer which was said to be operating in Pleasant Grove, Utah.

The CFTC said in an enforcement statement that the company was operating as a Retail Foreign Exchange Dealer (RFED), without being registered as such with the CFTC, and with fraudulently soliciting U.S. resident customers to trade leveraged foreign currencies (forex).

The Complaint charges GTF with acting as an unregistered Introducing Broker (IB) by soliciting U.S. customers to open forex trading accounts with Tallinex.

CFTC disclosed that at least September 2012 and continuing to at least September 2016, Tallinex fraudulently solicited and accepted at least $1.5 million from U.S. customers in connection with leveraged or margined forex transactions, to which it was or offered to be the counterparty. Moreover, according to the Complaint, in the course of soliciting retail forex customers, Tallinex made fraudulent misrepresentations and omissions of material fact and engaged in fraudulent and deceptive business practices. For example, Tallinex allegedly defrauded its U.S. customers by 1) falsely representing that Tallinex was lawfully doing business in the United States, 2) misrepresenting and omitting the likelihood of profits and risk of loss involved in trading their forex contracts, and 3) misrepresenting the safety of customer funds in the event of Tallinex’s financial collapse (i.e., counterparty risk).

According to the Complaint, Tallinex also operates an introducing broker program whereby GTF, and companies similar to GTF, introduce trading accounts to Tallinex and receive commissions on revenue generated by the accounts’ trading activity.

The CFTC said it will proceed with the litigation, to get restitution for defrauded customers, disgorgement of ill-gotten gains, a civil monetary penalty, permanent registration and trading bans, and a permanent injunction against future violations of federal commodities laws, as charged.

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