CFTC keeps looking for Tallinex, court sends summons to St Vincent and the Grenadines address

Maria Nikolova

There has been no answer yet by the broker, targeted by the CFTC in a lawsuit over alleged illegal offering of retail FX services to US clientele.

The United States Commodity Futures Trading Commission (CFTC) has a history of penalizing overseas Forex firms that offer retail FX services to US clients without having the necessary registration. The latest company to face such a regulatory action is Tallinex and the respective lawsuit against the broker was filed on May 30, 2017, at the Utah District Court.

Going after overseas-based companies can be a tricky matter. There are clauses in US laws, however, that regulate the issue of summons to non-US entities that have lawsuits filed against them in the United States. In the case concerning Tallinex, the Utah District Court refers to Federal Rules of Civil Procedure 4(f)(2)(C)(ii), which cover serving an individual in a foreign country. Under the law, the service can be done via mail.

Tallinex was already sent a summons to its address in Estonia. On June 20, 2017, the clerk of court certified that he served a true and accurate copy of the Summons & Complaint upon Tallinex by sending the documents by first class mail addressed to the company’s address in Estonia. There has been no answer to the summons yet.

Now, the CFTC is trying to reach Tallinex in St Vincent and the Grenadines, where the company also claims to have a registered address. As per court filings, seen by FinanceFeeds, on July 7, 2017, the clerk of court certified that he served a true and accurate copy of the Summons & Complaint upon Tallinex by sending the documents by registered mail to the company’s address in St. Vincent and the Grenadines.

Within 21 days after service of this summons on Tallinex, it has to serve on the plaintiff an answer to the attached complaint or a motion under Rule 12 of the Federal Rules of Civil Procedure. The answer or motion must be served on the plaintiff or plaintiff’s attorney. In case Tallinex fails to respond, judgment by default will be entered against the company for the relief demanded in the complaint.

The CFTC complaint alleges that from at least September 2012 to at least September 2016, the defendants solicited or accepted orders from retail FX customers located in the United States, with the sum accepted in excess of $1.5 million. The regulator is seeking (inter alia) a Court order requiring Defendants to pay civil monetary penalties in amounts the greater of: (i) $170,472 for each violation of the Act and Regulations; (ii) triple their monetary gain.

The CFTC also targets Utah-based General Trader Fulfillment (GTF), allegedly Tallinex’s introducing broker in the United States. GTF has already filed its answer to the CFTC complaint. GTF denies that it has operated as an introducing broker for Tallinex or that it has participated in an introducing broker program operated by Tallinex. GTF also denies that it has received commission on revenue generated by trading activity from Tallinex.

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