iForex, a online foreign exchange (“forex”) broker, has been fined and had its operating license suspended by the Hungarian Financial Supervisory Authority (“HFSA”). The Authority claims that it uncovered violations of consumer-protection rules, including instances of forex fraud and “unsafe trading” practices.
According to a rough translation of the Hungarian press release, iForex was found to give inadequate risk disclosures and be under-capitalized. The HFSA has levied a $100,000 fine for the perceived misconduct by iForex. The firm will remain suspended for 6 months, and in that time it cannot solicit or accept new forex customers and existing customers cannot trade new positions, though current positions will be unaffected. After 6 months, iForex may have its license reinstated if it carries out monthly audits and submits its data to the HFSA.
iForex was also registered with the UK’s Financial Services Authority (“FSA”). According to the FSA Register, the firm is no longer registered, but has no disciplinary actions against it.