Court gives Tallinex’s IB until June 27th to answer in CFTC case

Maria Nikolova

CFTC is seeking that Tallinex and its Utah introducing broker pay civil monetary penalties in amounts the greater of: (1) $170,472 for each violation of the Act and Regulations or (2) triple their monetary gain.

There is an update to the FinanceFeeds’ article about the US Commodity Futures Trading Commission (CFTC) starting a legal action against retail FX broker Tallinex and its Utah introducing broker General Trader Fulfillment (GTF) over illegally targeting and accepting US residents as their clients.

The Utah District Court filings show that General Trader Fulfillment was served the summons on June 6, 2017 and that its answer is due by June 27, 2017.

The relatively fast process when it comes to serving summons in the US is not surprising. We are more interested to see when (and whether) Tallinex will be served. The broker uses as a business address The Jaycees Building Stoney Ground, P.O .Box 362, Kingstown VC0100, St Vincent and the Grenadines, and also purports to have a business address in Estonia of Tornimae tn5, Kesklinna Iinnaosa, Tallina linn, Harju Maarkond 10145. How the US law representatives will reach the company is a tricky matter. The CFTC has successfully targeted overseas businesses in the past over similar matters. Back in 2013, when it launched a legal action against Sydney-based Halifax Investment Services, the defendant was served about a week after the summons had been issued.

The CFTC chose Utah for the legal action because: “Defendants transact business in this District and certain transactions, acts, practices, and courses of business alleged in this Complaint occurred, are occurring, and/or are about to occur within this District”.

We have to wait to see whether Tallinex co-operates.

As per the CFTC Complaint, which FinanceFeeds has seen, the regulator is seeking (inter alia) a Court order requiring Defendants to pay civil monetary penalties in amounts the greater of:

  1. $170,472 for each violation of the Act and Regulations

  2. triple their monetary gain.

Beginning in at least September 2012 and continuing to at least September 2016, the defendants have solicited or accepted orders from retail FX customers located in the United States, with the sum accepted in excess of $1.5 million.

During the relevant period, the FAQ section on Tallinex website stated, “Tallinex welcomes residents of the U.S. . . . and provides them with the same leverage and hedging facilities as non-U.S. . . . residents.” Moreover, Tallinex’s online application contained a drop down menu for the applicant to select his or her “country” and the U.S. was one of the choices. Although around September 2016, Tallinex changed its website to state that it does not accept US customers, the CFTC states, based on information and belief, that Tallinex still solicits and accepts funds from US customers.

Regarding the introducing broker – the CFTC alleges that GTF solicits US customers to open forex trading accounts at Tallinex as part of Tallinex’s “Introducing Broker Program.” When a customer contacts GTF to trade forex, GTF usually provides the customer with a “coach,” who GTF claims will teach the customer “how to trade forex profitably” using a demo account. Following the completion of several hypothetical trading sessions, GTF staff refer the customer to Tallinex to open a live forex account to start trading. GTF receives commissions for introducing customers to Tallinex.

Since approximately September 2012, GTF has referred at least thirty US customers who opened forex trading accounts at Tallinex.

The CFTC also notes the high leverage offered by Tallinex (up to 1:1000) and the promises of extraordinary profits, as well as the lack of provision of proper disclosure statements.

Neither Tallinex, nor GTF have been registered in the necessary capacity with the CFTC to target US retail FX customers. The defendants are alleged to have violated the Commodity Exchange Act and the Commission Regulation.

Read this next

Retail FX

Banxso announces 8.7% interest rate on deposits in South Africa

“With Banxso, they can enjoy the benefits of both worlds – earning competitive interest and having the freedom to trade, all within the same platform.”

Industry News

FINRA to publish transaction details in U.S. Treasury securities

“Consistent with our longstanding practice, FINRA is introducing greater transparency in a calibrated and careful manner, benefiting liquidity and resilience in this critical market while also mitigating potential information leakage concerns.”

Institutional FX

OpenYield launches “cheap and easy” fixed income trading for brokers

“We’re on a mission to make bonds cheap and easy to trade, and are excited about the opportunity to build generational capital markets infrastructure.”

Digital Assets

Sumsub and Mercuryo publish a guide for VASPs: “Mastering Travel Rule Compliance”

“At Sumsub, we’ve concentrated our efforts on filling the gap in understanding the complexity of Travel Rule regulation and helping organizations find the best solution to stay safe and compliant while minimizing costs and avoiding potential risks of non-compliance. This guide we created with Mercuryo, our trusted partner, is the ultimate navigation tool all VASPs can consult.”

Digital Assets

Bitget Wallet Leads with Record Swap Volume & New Crypto Innovations

This week, Bitget Wallet achieved a milestone by surpassing Metamask with a record 388,757 Swap order transactions, securing the global lead. The significant 7-day trading volume, almost 68,000 more than its rival, underscores its liquidity and user trust. This robust activity signals Bitget Wallet’s prominent role and reliability in the dynamic crypto market.

Digital Assets

Embarking on a Digital Currency Journey

Imagine you’ve stumbled upon a treasure map, leading you to untold riches hidden in the vastness of the internet. Instead of gold coins and jewel-encrusted goblets, this treasure comes in the form of digital currencies, the modern-day loot coveted by many.

Reviews

Traders Union Experts Share The Trading Analyst Review For 2024

Navigating options trading in rapidly shifting markets poses a considerable challenge. This is where options trading alert services become invaluable. They aid traders in keeping abreast of evolving opportunities and market trends. In this assessment, Traders Union experts scrutinize The Trading Analyst alert service to ascertain its efficacy. 

Digital Assets

BlockDAG’s Presale Achieves $9.9M: Aiming For A 5000-Fold ROI As Cardano’s Price Rises And Fantom Launches Sonic

Explore Cardano’s surge, Sonic’s efficiency, and why BlockDAG’s growth makes it the top crypto choice. A deep dive into the future of blockchain investments.

Digital Assets

US, UK probe $20 billion Tether transfers tied to Russian exchange.

U.S. and UK authorities are investigating the movement of $20 billion in the USD-pegged stablecoin tether (USDT) through Moscow-based exchange Garantex.

<