For the past several weeks we have been covering the 14 enforcement lawsuits the Commodity Futures Trading Commission (CFTC) in federal courts throughout the country. Aside from a few requests from the CFTC to postpone proceedings due to an impending government shutdown, there has not been much movement in these cases. For the most part, the CFTC’s complaints have remained unanswered.
However, there has been some interesting news in the case of Wall Street Brokers, LLC (WSB). The Delaware limited liability company was originally sued by the CFTC on January 26, 2011 for operating as a retail foreign exchange dealer (RFED) without registering with the Commission. WSB never responded to the complaint in the lawsuit, and did not comply with the preliminary injunction issued against it by the Federal Court. Today, the Court issued an order against WSB finding that the company violated the Commodity Exchange Act, as modified by Dodd-Frank, by soliciting client orders for retail foreign exchange transactions without registering with the CFTC.
In its order, the Court issued a permanent injunction against WSB, prohibiting the company from soliciting or accepting orders for forex transactions from non-ECP clients, acting as a counterparty in these forex transactions, trading on a commodities exchange, entering into commodity futures transactions, or registering with the CFTC in any capacity. The company was also ordered to remove its website and pay a civil monetary penalty of $280,000.
Aside from FX Price, LLC, which we mentioned in our previous post, the only other defendant in these cases to respond to the allegations against them is InvestTechFX, Inc. The company is currently defending itself against a request from the CFTC for a preliminary injunction that would prohibit the company from performing certain acts the CFTC deems to be violating the Commodity Exchange Act while the lawsuit is pending.
Click here for the full text of the April 12, 2011 Order against Wall Street Brokers, LLC.