The US Commodity Futures Trading Commission (CFTC) has obtained a federal court consent order requiring Windsor Brokers, Ltd, of Limassol, Cyprus, to pay a USD140,000 civil monetary penalty to settle CFTC charges.
Windsor unlawfully solicited US customers to engage in foreign currency (forex) transactions and operated as a Retail Foreign Exchange Dealer (RFED) without being registered with the CFTC.
The consent order, entered on March 6, 2012, by Judge Elaine E. Bucklo of the US District Court for the Northern District of Illinois, permanently bars Windsor from engaging in any conduct that violates the Commodity Exchange Act (CEA) and CFTC regulations, as charged. The order also directs Windsor to prominently display a notice on its website that Windsor does not provide services for US customers.
In the forex market, RFEDs and some registered commodity futures brokers may buy forex contracts from, or sell forex contracts to, individual investors who do not possess sufficient net worth to qualify as eligible contract participants (ECPs). These firms are required to register with the CFTC and abide by rules and regulations designed for investor protection, including those relating to minimum capital requirements, record-keeping, and compliance.
Specifically, the order finds that beginning on 18 October , 2010, and continuing until 30 November, 2011, Windsor solicited orders from low net worth (non-ECPs) US customers to open leveraged forex trading accounts through its website. The order finds that Windsor acted as an RFED by offering to be, and acting as, a counterparty buying and selling forex contracts with US customers without being registered as an RFED. According to the order, Windsor liquidated all of its US customers’ accounts, and no US customers have any open accounts at Windsor.
The CFTC appreciates the assistance of Germany’s Bundesanstalt für Finanzdienstleistungsaufscicht (BaFin) and the Securities and Exchange Commission for the Republic of Cyprus (CySEC).
CFTC Division of Enforcement staff responsible for this case are Susan B Padove, Elizabeth M Streit, Joy McCormack, Scott R Williamson, Rosemary Hollinger, and Richard B Wagner.
