CFTC Unveils Forex Fraud Task Force

CFTC Unveils Forex Fraud Task Force - 8/11/2008

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CFTC Unveils Forex Fraud Task Force
Evan Weinberger

Securities Law 360. August 11, 2008
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EXCERPT: The U.S. Commodity Futures Trading Commission On Monday Announced The Formation Of A New Task Force To Investigate And Litigate Fraud In The Off-Exchange Retail Foreign Currency Market. The New Task Force, Which Is Already Staffed, Will Be Housed In The CFTC's Enforcement Division And Will Continue The CFTC's Work With State And Federal Regulators As Well As Criminal Enforcement Agencies. The CFTC Would Not Say How Many Investigators Have Been Assigned To The Task Force. “Not Only Do Forex Fraudsters Prey Upon Unsuspecting Citizens, But Their Illegal Activities Taint The Reputations Of Those Working Honestly In The Futures Industry,” CFTC Commissioner Michael Dunn, Head Of The Agency’s Forex Education And Outreach Task Force, Said In A Statement Announcing The New Task Force. “This Announcement Sends A Clear Signal That The CFTC Is On The Beat, And That Our Continued And Increased Cooperation With Law Enforcement Authorities Will Help Put These Forex Dealers Where They Belong — In Jail.” The Refined Push Against Fraud In The Forex Market Was Part Of The The Food, Conservation, And Energy Act Of 2008, Better Known As The Farm Bill. Congress Overrode President Bush's Veto Of The Farm Bill In June. Under The Farm Bill, Congress Clarified CFTC's Role In Preventing Fraud In The Retail Forex Market. The Bill Also Created A New Registration Category For Foreign Exchange Dealers And Required Registration Of Market Players That Solicit Offers, Exercise Discretionary Trading Authority And Operate Pools In Forex Trading. The Legislation Also Set A Minimum Capital Requirement For Futures Commission Merchants And Retail Forex Dealers Involved In Foreign Currency Transactions Of $20 Million. Forex Traders Enter Into Contracts Allowing Them To Buy Or Sell A Specific Amount Of A Foreign Currency In Exchange For A Fixed Amount Of U.S. Dollars.

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