The US Commodity Futures Trading Commission (CFTC) has filed a lawsuit against offshore forex broker Tallinex for accepting clients from the US without having a license.
According to the site Law360, CFTC claims that in the period September 2012 – September 2016 the broker violated the Commodity Exchange Act and agency rules by not registering as a retail foreign exchange dealer with the commission, but solicited and accepted US forex clients. According to CFTC, Tallinex took at least $1.5 million from US clients.
“Tallinex has never been registered with the commission in any capacity,” CFTC said in the complaint and added that “Tallinex has falsely represented to U.S. customers that it is lawfully doing business in the U.S.” Furthermore, the broker never disclosed to its clients that it is not registered with the relevant authorities.
The case will be heard by a district court in Utah.
On its site the broker says that it does not accept clients from the US (and several other countries and territories), but, according to Law360, this text has been added after September 2016.
Last April CFTC has put Tallinex on its warning RED list of unregistered, or as it calls them, “Registration Deficient” that currently features more than 71 forex and binary options brokers.
Tallinex was established in Estonia, but is registered in the offshore zone Saint Vincent and the Grenadines, which is known for its cheap and easy incorporation procedures and non-existent regulation.
The broker offers trading in forex and CFDs on MetaTrader 4 with a leverage of up to 1:1000.