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How can you tell if you’re depositing your hard-earned funds with a reputable and regulated forex broker? This is a question often asked by newbies so I did a little more digging to see how our financial market watchdogs can help regular Joes like you and me.

If you’ve been a good student in our School of Pipsology, you’d recall that the Commodity Futures and Trading Commission (CFTC) and the National Futures Association (NFA) are in charge of regulating the forex industry. In particular, the CFTC is in charge of overseeing the entire futures industry (which includes the forex market) and being on the lookout for fraud or abusive practices while the NFA does the nitty-gritty compliance and background checks.

The problem is, ordinary folks usually find out about broker scams only when investigations are ongoing and after charges have been filed… or worse, after they’ve already lost their funds to a fraudulent company. And even if a trader has fallen victim to a scam, it’s not that easy for him or her to take action, get the authorities’ attention, and seek compensation for damages.

Fortunately for us, Big Brother CFTC stepped up its game in providing the investing public with resources to guide them in transacting with regulated financial firms and individuals. Just recently, they launched a couple of tools that can help market participants to conduct their own background check on forex brokers and to report potential violations.


CFTC’s SmartCheck website gives traders easy access to free tools that can allow them to check the background of financial professionals. There are three options provided:

  • NFA’s BASIC check for financial professionals and firms that trade futures, options on futures, and forex
  • FINRA’s broker check for financial professionals and firms that sell stocks, bonds, mutual funds, and other securities
  • Your good ol’ internet search, which is apparently powered by Bing


The website advises investors to go through all three options and contact state regulators for additional questions. In addition, SmartCheck provides several educational (and funny!) videos and helpful infographics to help investors detect signs of fraud. It also includes a link to the CFTC’s Red List, which contains foreign entities that solicit funds from U.S. clients but aren’t properly registered.

Whistleblower Program

In addition to encouraging the investing public to submit tips on potential violations of the Commodity Exchange Act by filing an official complaint form, the CFTC also launched a new Whistleblower’s website and program to provide incentives to those who are able to help authorities track down these fraudsters.

Aside from that, the website outlines whistleblower rights and protections, as well as guides for filing complaints. This Whistleblower Program was actually created as part of the Dodd-Frank Wall Street Reform Act in 2010, providing monetary awards to whistleblowers whose tips are able to result to successful CFTC enforcement action and more than $1 million in sanctions.

There you have it, forex fellas! I hope you can be able to make use of these tools before doing business with a forex broker or when you spot signs of fraud. Always remember, doing a little extra research never did anyone any harm!