InterForex avoids fine in settling CFTC action
Several other unregulated firms ended up paying hefty fines.
British Virgin Islands-based unregulated Forex broker InterForex has avoided fines in settling CFTC charges that it took on / solicited U.S. clients. The CFTC just required InterForex to prominently display a notice on its website that InterForex does not provide services for U.S. customers.
Other firms similarly charged by the CFTC for taking/soliciting U.S. clients did not get off so easy, for example FXOpen, which as we reported in January paid a $140,000 fine. The CFTC last January named 14 firms, and another 11 firms in September, for illegally going after U.S. clients.
The CFTC mentioned in its press release that it thanks the BVI's FSC (or "Financial Services Commission") for its assistance, but interestingly InterForex is not listed as one of the BVI's "licensed" Forex firms. As those who follow the Forex industry know, during the industry's formative years many unregulated Forex firms incorporated in the BVI (but were almost always physically located elsewhere). The BVI, under pressure from European and other governments, ended that in 2010, creating its own form of regulation for firms offering Forex trading services, issuing the first license in June 2011 to Gallant Capital Markets.
For more on Forex industry regulation see the LeapRate-Dow Jones Forex Industry Report.