July 31, 2018

CFTC Sues Forex Dealer for Registration and Disclosure Violations

JAFX, Ltd. Solicits U.S. Retail Customers to Trade Forex without Registering as a Retail Foreign Exchange Dealer

Washington, DC – The Commodity Futures Trading Commission (CFTC) filed a civil enforcement action in the U.S. District Court for the District of Utah against JAFX, Ltd. (JAFX), a/k/a JAFX, EOOD, of Sofia, Bulgaria and Kingstown, St. Vincent and the Grenadines.  The CFTC Complaint alleges that, from at least September 2016 and continuing to the present, JAFX operates as a retail foreign exchange (forex) dealer, without being registered with the CFTC, as required, and that it fails to provide customers with the required Risk Disclosure Statement.    

Specifically, the CFTC’s Complaint, filed on July 27, 2018, charges that JAFX has been the counterparty to leveraged, retail forex transactions for customers located in the United States, who are not Eligible Contract Participants (ECPs).  JAFX allegedly solicits orders from U.S. customers who are not ECPs to open leveraged, retail forex trading accounts through JAFX’s website, as well as videos on YouTube, where JAFX is, or offers to be, the counterparty to each leveraged retail forex transaction.  Customers are directed to open trading accounts by submitting an online account application through JAFX’s website, and JAFX encourages customers to access and trade their accounts via a mobile application, according to the Complaint.  U.S. customers allegedly may open an account with JAFX for as little as $100.

The CFTC appreciates the assistance of the Financial Supervision Commission of Bulgaria.

The CFTC Division of Enforcement staff members responsible for these cases are Timothy J. Mulreany and Paul G. Hayeck.

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CFTC’s Foreign Currency (Forex) Fraud Advisory

The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Foreign Currency Trading (Forex) Fraud Advisory, which states that the CFTC has witnessed a sharp rise in Forex trading scams in recent years and helps customers identify this potential fraud. 

Also, before investing or trading with a firm, check the firm’s registration status and disciplinary history, if registered, with the National Futures Association.  A company’s registration status can be found at: www.nfa.futures.org/basicnet.

Customers can report suspicious activities or information, such as possible violations of commodity trading laws, to the CFTC Division of Enforcement via a Toll-Free Hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online.