Are You Trading with a Registered Broker?

A few days ago, I wrote about the National Futures Association (NFA) stepping up its game when it comes to sniffing out unfair trading practices. This week, let’s look at how the U.S. Commodity Futures Trading Commission (CFTC) is doing its part in protecting traders like you and me.

Luckily for us, regulatory agencies are there to prevent fraudulent behavior or help us if we get scammed and cheated out of our hard earned money. In light of the recent financial crisis, government agencies have stepped up their efforts towards establishing regulations that require firms to register with the CFTC.

Just recently, the CFTC, a regulatory agency that serves as a watchdog against scammers and fraudulent brokers, filed enforcement actions against 14 forex firms that were operating without being registered. Better make sure you’re not forking over your hard-earned cash to these forex companies which were sued by CFTC:

1. EuroForex Development LLC, a Delaware LLC
2. FIG Solutions Limited, Inc., a Delaware corporation
3. ForInvest, a Delaware corporation
4. FXOpen Investments Inc., a foreign entity with various business operations located throughout the United States
5. FXPRICE, a Delaware LLC
6. GIGFX, LLC., a Delaware company
7. InovaTrade, Inc., a company with purported offices in Florida
8. InstaTrade Corporation d/b/a InstaForex, a British Virgin Islands company
9. InvesttechFX Technologies, Inc., a Canadian corporation located in Toronto
10. J&K Futures, Inc., a company with purported offices in California and New York
11. Kingdom Forex Trading and Futures, Ltd., a Nevada company
12. Prime Forex, LLC, a Delaware LLC
13. Wall Street Brokers, LLC, a Delaware LLC
14. ZtradeFX LLC, a Connecticut LLC.

According to the CFTC press release, two of these firms, Ztrade FX LLC and FXPRICE, allegedly acted as an unregistered introducing broker by soliciting customers to trade with brokers. The rest of the twelve firms acted as retail foreign exchange dealers (RFED) or Futures Commission Merchants (FCM) without registering with the CFTC.

This recent crackdown was the first use of the 2008 Farm Bill and the Dodd-Frank Act (and no, the Farm Bill isn’t a bill towards the regulation of trading crops on Farmville). Under the new legislations, forex exchange dealers or brokers are required to register with the CFTC in order to offer their services to the public. Furthermore, under CFTC regulations, members must abide by all the rules set forth by the CFTC, which are designed to for any investor’s own protection. That means you!

Why is the CFTC making such a big fuss over having forex firms registered?

Well, the advantages of trading with a registered forex broker should be obvious. Regulation helps ensure that you get the best product and service available and that the broker is acting fairly. Remember a couple weeks ago when I talked about a certain platform that had a plug-in that benefitted the broker? That wouldn’t have been spotted without the intervention of government regulation!

Of course, the CFTC and the NFA will also need YOUR help to do their job easier and better. For one, you could check out the CFTC’s case status reports to see if your broker is among the companies with charges against them, or if they are registered at all. This way you’ll be able to cut your losses quickly, or prevent yourself and your friends from being conned by those savvy, freebie-giving “brokers”.

Also, if you happen to witness a violation and decide to report it, you can check out their site where you can file a complaint to the CFTC’s Office of Proceedings (clearly creativity is not their specialty). In fact, they even provide other services so you can call or e-mail them if you’re having trouble tracking or proceeding with your case. With all these aids that the CFTC is providing, you have no excuse for being an ill-informed or irresponsible trader!

That’s it for my expose this week! Tune in again next week as I unveil more industry tricks and other information that might help you find your way around the forex jungle. In the meantime you can meet up with other traders on the best forex trading community, or check out our Twitter and Facebook accounts for more updates.

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  • Sircharlesdc

    Michael Alcocer and Iricelis Bloise Alcocer have stolen over $10 Million
    Dollars from its gullible investors. Both criminals are presently in
    Panama,while operating a successful Ponzi Scheme with FOREX trading.

    Amazingly, the positive reviews that you find on the net, its actually
    “Michael” posing with an ALIAS in order to deceive his victims. Be alerted,
    Michael & Iricelis have defrauded and stole over one million dollars from
    broker- Gilbert Gonzalez from Puerto Rico 787-510-4500. // State of Florida
    Financial Crimes – Agent Jose Mayo 305-318-6702

    Furthermore, here is an official link from SEC. http://www.cftc.gov/ucm/groups

    Be warned, Michael & Iricelis, are notorious criminals and should be
    considered armed and dangerous. Moreover, Michael has a criminal record in
    Virginia for carrying a loaded weapon in an airplane, heading toward Colombia in
    order to money launder his capital.

    Both criminals are extremely
    friendly, amicable and sociable in order to act their role as professional
    investors. They claim to possess gold mines in Nicaragua, brother in Shangai
    with $30 million, and an inheritance of $100 million in order to convince people
    that they are wealthy!!!!

    These are all false declarations and inventions, all you need is to
    authenticate such. His new partners in crime named Jordan Sterling, Kenneth
    Santana, and Jose Tejedor, esq have all joined the organized gang.They also
    frequent Nicaragua, Peru, Colombia, and Puerto Rico. Please post this data in
    your site in order to prevent future victims!!!!Charles Del CampoSircharlesdc@aol.com305-529-4949

  • abshehu

    thank you very much for this valuable information. keep it up please.

  • abshehu

    thank you very much for this valuable information. keep it up please.

  • lakeside

    I’m a newly registered member even though i’ve been visiting this site for sometimes now, I want you to know that i finally registered because of your GREAT work on this thread i’ve always followed it.
    You know it’s quite re-assuring to know that there are some agencies regulating all these brokers,that at least build more confidence in us investing our hard earned money in this “pipping” business.

    More grease to your elbow!

  • lakeside

    I’m a newly registered member even though i’ve been visiting this site for sometimes now, I want you to know that i finally registered because of your GREAT work on this thread i’ve always followed it.
    You know it’s quite re-assuring to know that there are some agencies regulating all these brokers,that at least build more confidence in us investing our hard earned money in this “pipping” business.

    More grease to your elbow!