CFTC secures default order against Tallinex as broker does not reply to complaint

Maria Nikolova

Tallinex has failed to appear or otherwise defend, and the time allowed by law for answering has expired.

The United States Commodity Futures Trading Commission (CFTC) has secured a default order against retail FX broker Tallinex which has failed to respond to the complaint filed against it at the Utah District Court. As FinanceFeeds reported, the CFTC filed a Motion for a Clerk’s Order of default against the broker last week. On Monday, April 23, 2018, the order was granted.

Let’s recall that the CFTC managed to serve the complaint and the summons to Tallinex on August 15, 2017 at the company’s address in Saint Vincent and the Grenadines. The defendant, however, has failed to appear or otherwise defend, and the time allowed by law for answering has expired, the Court Clerk said on Monday.

The entry of a Clerk’s Order of Default against an entity is typically a precursor to the entry of a default judgment against the defendant by the Court. So, it is highly likely that the next step by the CFTC in this case would be to ask the Court to to issue a default judgement against Tallinex.

The CFTC complaint alleges that, from at least September 2012 to at least September 2016, Tallinex and its introducing broker General Trader Fulfillment (GTF) solicited or accepted orders from retail FX customers located in the United States, without having the necessary registration. 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.

GTF has made its stance regarding the CFTC allegations clear by denying that it was Tallinex’s introducing broker. GTF has admitted it has never been registered with the CFTC, but denied that it was required to be registered with the regulator. GTF also denied that it had received commission on revenue generated by trading activity from Tallinex. In addition, GTF denied that it solicited US customers to open forex trading accounts at Tallinex.

In December last year, the Court agreed to grant a time extension requested by the CFTC in this case, so that the regulator may pursue settlement talks with GTF.

The case is captioned Commodity Futures Trading Commission v. Tallinex et al (2:17-cv-00483).

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