The Commodity Futures Trading Commission (CFTC) in the US is seeking a court order that will direct retail forex broker Tallinex to pay a civil monetary penalty and restitution to a total amount of US$12.6 million, according to the Financefeeds portal.
The CFTC estimates that 711 customers are still owed a total of US$10,289,391 from their investment with Tallinex, an Estonian company registered and doing business in the Caribbean state of St. Vincent and the Grenadines.
Together with a potential penalty and interest, the sum total to be claimed is set be US$12.6 million.
On 6 July, 2018, the US regulator filed a motion for a Default Order against Tallinex at the Utah District Court. The proposed default judgement includes civil injunctive relief, equitable relief in the form or restitution, and civil monetary penalties.
The CFTC's complaint alleges that between at least September 2012 and at least September 2016, Tallinex solicited and accepted orders from US retail customers in connection with leveraged or margined forex transactions and offered to be the counter-party to these transactions.
Tallinex's solicitation and acceptance of forex transactions from US retail customers without being registered as a Retail Foreign Exchange Dealer (RFED) violated the Commodity Exchange Act and Commission Regulations (CEA - first passed in 1936).
The complaint also alleges that in the course of soliciting US customers, Tallinex engaged in fraudulent and deceptive business practices, which violated anti-fraud and other provisions of the CEA, including misrepresenting and omitting material facts and failing to disclose risk and other information mandated by the commission. In particular, Tallinex designed its website specifically to attract US customers, it has been claimed.
Tallinex OÜ is owned by Finnish nationals Terry Salo, Tommi Hamalainen and Turkka Partanen, as well as the Seychelles-registered company Trade Strategists Limited.
Editor: Andrew Whyte