Release: 5230-06

For Release: September 21, 2006

U.S. Commodity Futures Trading Commission Settles Foreign Currency (Forex) Futures Fraud Action

Axess Trading Co., Inc. Ordered to Pay Over $550,000 in Restitution and Civil Monetary Penalties, Among Other Sanctions

Washington, D.C.— The U.S. Commodity Futures Trading Commission (CFTC) announced today that the United States District Court for the Southern District of New York entered a consent order imposing a permanent trading and registration ban against Axess Trading Co., Inc. (Axess) and ordering it to pay $329,437.79 in restitution to customers and a $240,000 civil monetary penalty.

The order stems from an ex parte complaint filed by the CFTC on June 7, 2004, charging Axess with violating the Commodity Exchange Act (CEA) by engaging in the offer and sale of illegal, off-exchange foreign currency (forex) futures contracts to retail customers, and by misrepresenting its regulatory status to prospective customers (see CFTC News Release 4938-04, June 14, 2004).

The consent order, entered on September 12, 2006, finds that, from at least September 2003 until June 2004, Axess solicited and accepted at least $600,000 in funds from at least 12 retail investors through personal solicitations, emails, and its website (www.axesstrade.com) to trade illegal, off-exchange forex futures contracts. The consent order also finds that Axess falsely implied that it was fully regulated by the CFTC and the National Futures Association (NFA), a futures industry self-regulatory organization, and therefore subject to the full regulatory powers of the CFTC and the NFA. For instance, Axess assured customers that if they believed Axess had violated the CEA, they could commence a reparations proceeding before the CFTC. However, as the order finds, Axess was never registered with the CFTC in any capacity, nor was it a member of the NFA. Moreover, the CFTC’s reparations program is only available to customers of entities registered with the CFTC.

The following CFTC Division of Enforcement staff were responsible for this action: Judy Lee, Michael Otten, Joseph Rosenberg, and Gretchen Lowe.

Media Contacts
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202-418-5080

Dennis Holden
202-418-5088
 

Last Updated: October 4, 2011