Retail forex broker Tallinex, which was punished in Estonia in 2016 already for operating without an activity license, was ordered by a US federal court to pay more than $10 million in restitution to US customers as well as a civil penalty of $681,888.
"The Tallinex incident clearly indicates the international dimension of financial crime and that violators will be found and punished," Kilvar Kessler, chairman of the board of Estonia's Financial Supervision Authority (FSA) said in a press release. "The FSA's communication with its US colleagues is proof of how important and effective the cross-border cooperation of state institutions is."
The FSA in 2014 submitted a criminal complaint regarding Tallinex to investigative bodies as the company provided forex investment services in Estonia without holding a corresponding activity license. The Prosecutor's Office launched a criminal investigation on the basis of the complaint, which ended with a plea deal in 2016. According to the regulation of the prosecutor, the necessary elements of an offence were fulfilled.
While the criminal investigation was underway in Estonia, Tallinex continued providing forex investment services outside of the European Economic Community (EEC), including in the US, while allegedly holding an activity license in the island state of Saint Vincent and the Grenadines.
The Estonian financial watchdog cooperated fully with the US Commodity Futures Trading Commission (CFTC) to identify the content and volume of the forex investment services provided by Tallinex in the US. The Bulgarian Financial Supervision Commission and the Czech National Bank likewise participated in this cooperation.
The CFTC submitted a complaint to the court as a result of which the court ordered Tallinex to pay $10.3 million in restitution to US customers as well as a civil penalty of $681,888.
Editor: Aili Vahtla