How US government shutdown may be beneficial to Forex and binary options fraudsters?
During what turned out to be a very short-lived US government shutdown, the CFTC filed numerous motions with Courts to stay proceedings against Forex and binary options fraudsters.
The end of last week and the start of this one were marked by the US government shutdown. Although short-lived, it indicated how various agencies would react to such a development – which operations would keep working and which would be halted or curtailed…
Whereas the website of the United States Securities and Exchange Commission (SEC) displayed a message that the Commission would continue its main operations, the website of the Commodity Futures Trading Commission (CFTC) did not provide any particular information on how its work would proceed during the shutdown.
It turned out, however, that the group of those to feel the impact from the government shutdown includes Forex and binary options entities that are currently targeted by CFTC investigations and lawsuits. Starting on Friday (January 19, 2018) and continuing on Monday (January 22, 2018), the CFTC filed a number of motions at various US Courts, asking that proceedings against various entities are stayed as a result of the government shutdown.
Below is an excerpt of one of these motions:
“Plaintiff U.S. Commodity Futures Trading Commission (“CFTC”) requests that this Court stay the deadlines in this matter pending the current government shutdown. The Federal Government is presently shut down, and all non-essential employees are being furloughed and prohibited by law from performing actions related to their employment. See 31 U.S.C. § 1341 (“Anti-deficiency Act”).
The CFTC is taking steps to effectuate the shutdown, but also ensure (a) that it complies with all of its obligations before this Court; and (b) that it does not violate the Anti-deficiency Act. Accordingly, the CFTC requests that, the Court stay all deadlines in this case until such time as undersigned counsel’s employment status is reinstated. Upon reinstatement of the employment status of the undersigned counsel, the CFTC shall seek to lift the stay and, with consultation with counsel for Defendants, request the Court set new deadlines.”
Such motions have been filed (inter alia) in the cases brought by the CFTC against retail FX broker Tallinex, binary options firms Citrades and Autotradingbinary, as well as commodity futures trader William H. Powderly IV, to name a few examples.
The Judge assigned to the Powderly case has already denied CFTC’s motion to stay the proceedings, saying the motion is moot. This is normal given that the shutdown ended. It is likely that the other motions would be greeted with similar judicial reactions.
The inference to draw is that the US government shutdown does have consequences for the online trading industry, as fraudulent entities may have a reprieve and retail investors may suffer, as they are apparently deprived of important means of protection.