The Commodity Futures and Trading Commission (CFTC) has filed a proposed consent order with JAFX Ltd with the Utah District Court, in which the latter will pay a civil monetary penalty of $600,000.
As Finance Magnates reported, back in 2018, the commodities regulator charged JAFX with operating as an unregistered foreign exchange (forex) dealer within the United States, violating the Commodity Exchange Act.
Now, according to a document seen by Finance Magnates, the CFTC’s legal counsel and JAFX have agreed to the entry of a Supplemental Consent Order of Permanent Injunction and Other Equitable and Statutory Relief, in which the offshore company will pay a civil monetary penalty of $600,000.
In particular, the CFTC said that JAFX, a company claiming to be a Bulgarian FX broker, took funds from U.S. traders by conducting retail foreign currency trades without being registered.
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The CFTC also alleged that the unregulated offshore broker misrepresented its profit probability and risk of loss to customers and never disclosed that it was acting as a counterparty to FX transactions without proper registration.
According to its website, JAFX has been in business since 2013, and it operates in the jurisdiction of St Vincent and the Grenadines. It claims to offer a true ECN/STP brokerage and also provides the MetaTrader 4 platform. Further, the company’s payment services are handed by JAFX EOOD, which is based out of Sofia, Bulgaria.
The most recent development from the CFTC and JAFX saga comes just one month after documents were filed with the Utah District Court, which showed that the commodities regulator and JAFX seemed to be close to a settlement.
CFTC continues to be vigilant against fraud
In recent months, the CFTC appears to be on a roll, with the regulator issuing charges to alleged fraudulent companies almost on a daily basis. Just yesterday, the watchdog obtained a permanent injunction from the U.S. District Court for the Northern District of Alabama against Aaron B. Butler and his company, Negus Capital Incorporated (NCI), both of Alabama.
NCI and its owner were charged earlier in November 2019 with fraudulent solicitation, misappropriation, and registration violations in connection with binary options trading.