Forex Information

The Commodity Futures Trading Commission (CFTC) has witnessed increasing numbers, and a growing complexity, of financial investment opportunities in recent years, including a sharp rise in foreign currency (forex) trading scams. A federal law enacted in December 2000, called the Commodity Futures Modernization Act of 2000 (CFMA), makes clear that the Commission has the jurisdiction and authority to investigate and take legal action to close down a wide assortment of unregulated firms offering or selling foreign currency futures and options contracts to the general public. In addition, the CFTC has jurisdiction to investigate and prosecute foreign currency fraud occurring in its registered firms and their affiliates.

In light of the CFMA, the CFTC has issued an Advisory concerning the offering and trading of foreign currency futures and options contracts involving the retail public, and also revised and re-issued its 1998 Consumer Alert on foreign currency trading to help the retail public identify foreign currency trading scams. The CFTC’s Advisory reaffirms that off-exchange trading of foreign currency futures and options contracts with retail customers by a counterparty that is not a regulated financial entity as set forth in the CFMA is unlawful.

In its separate Consumer Alert, the CFTC warns consumers of sales solicitations appearing in newspapers, radio or television promotions, or attractive Internet websites, touting high-return, low-risk investment opportunities in foreign currency trading, and of highly paid currency-trading employment opportunities. The CFTC urges the public to be skeptical of such claims and suggests some "red flags" to look for, and cautionary steps to take, before trading foreign currency products.
Division of Trading and Markets Advisory Concerning Foreign Currency Trading By Retail Customers - March 2002
Advisory on Foreign Currency - February 5, 2001
Consumer Advisory: Beware of Foreign Currency Trading Frauds
Consumer Advisory Brochure on Forex Fraud
Questionnaire Form - to report information to the CFTC regarding forex (or other commodity futures or options) activities