CFTC Orders Estonian Forex Broker Tallinex to Pay $10M in Restitution


US regulator CFTC orders Estonian Forex Broker Tallinex to pay $10 million in restitution and a civil penalty of $681,888. The Default Order has found that the Estonian brokerage has been operating as an unregulated Forex dealer.

20 July, AtoZ Markets It appears that the US Commodity Futures Trading Commission (CFTC) has been pretty active recently. The regulator has issued a fine for two illegal Binary Options operators, as we reported earlier today. Now, here is yet another announcement from the US watchdog.

CFTC Orders Estonian Forex Broker Tallinex to Pay $10M in Restitution

This time, the US CFTC states that Judge David Nuffer of the US District Court for the District of Utah has issued an Order for Final Judgement against the entity called Tallinex Ltd. The company is an Estonian brokerage that used to hold a license to do business in St. Vincent and the Grenadines. 

The Order from the Judge obliges the entity in question to pay $10,289,391 in restitution to the US customers and a civil penalty of $681,888. It also permanently bans Tallinex from breaching the Commodity Exchange Act (CEA).

Judge Nuffer has entered another Order against General Trader Fulfillment (GTF). The latter is a Nevada company located in Pleasant Grove, Utah, which has introduced the US customers to Tallinex. The Consent Order requires GFT to pay a civil monetary penalty of $85,000 and it also prohibits the company from violating the CEA.

Tallinex Was Misrepresenting Itself as a Legal Entity

The Default Order has found that the Estonian brokerage has been operating as an unregulated Forex dealer. The order mentions that the company has been soliciting or accepting orders for leveraged or margined Forex transactions from retail US customers. The company has been offering to be or was the counterparty to such contracts with its clients without any authorization to do so. 

Furthermore, the Order has also found that Tallinex has defrauded these customers by misrepresenting some of the material facts. The order explains:

“Specifically, the Default Order found that Tallinex falsely represented that it was lawfully doing business in the United States, falsely and misleadingly represented that customer funds were segregated and protected in the event of Tallinex’s financial collapse, and Tallinex failed to disclose risks but promoted extraordinary profits of between 162.29% up to 1301.10% to create the impression that forex investments made with it were likely to be profitable so that it could increase its number of customer accounts.”

Following on this, the Consent Order finds that GTF paid “coaches” to each its clients Forex trading via hypothetical accounts. The order found that at least one coach has introduced US customers to Tallinex in an attempt to open and maintain individual Forex trading accounts within Estonian brokerage. 

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