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CFTC Adds 71 New Names to RED List

Posted by DRutherford /
Red list

We recently added 71 new names to our Registration Deficient (RED) List, a resource that helps traders identify foreign entities that are not registered with the Commodity Futures Trading Commission (CFTC), but appear to be operating in a capacity that requires registration. For example, they may appear to be soliciting U.S. customers to trade in foreign currency (forex) or binary options, which requires registration with the CFTC.

Since the CFTC launched in the RED List in September 2016, the list has grown to more than 110 unregistered foreign entities.

Why is Registration with the CFTC Important?

Generally, foreign entities that solicit you to trade are required to register with the CFTC. For this reason, it’s important to proceed with caution if any unregistered entity solicits you. The CFTC publishes names of these foreign entities to help the public make informed decisions.

While registration is no guarantee against fraud or mismanagement by an otherwise unscrupulous firm, it does bring a higher level of security and accountability to the public. For example, registration enables the CFTC to examine whether firms meet minimum financial standards as well as disclosure, reporting and recordkeeping requirements. Checking to make sure a firm is properly registered is an essential step to guarding against fraud.

When you work with registered firms, you’ll also know you may have a way to resolve disputes, in the event that you encounter fraud or other problems. The CFTC’s Reparations program provides a forum to address complaints and resolve disputes between registered commodity futures trading professionals and their customers, including determining monetary rewards.

Watch Out for Online Fraud

Many unregistered foreign entities that solicit or accept funds from U.S. residents have no physical presence in the United States, though they may suggest they do. They may operate entirely online, creating the appearance of legitimacy through polished websites, active social media profiles and even mobile apps.

Through online platforms and apps, traders can quickly and easily open accounts, fund the accounts with their credit cards, and begin placing trades. Fraudsters use search engines, emails, and popular investor websites to advertise their trading system, even posting fake testimonials and reviews. No matter how substantial a firm appears to be online, investors should remain skeptical and always ensure the entity is registered with the CFTC before providing credit card numbers or personal information.

No matter how legitimate or enticing an opportunity may seem, always remain skeptical, run a background check and check the RED List. If you suspect fraud, submit a tip to the CFTC.

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