Almost 500 USD fine for Gain Capital UK

Gain Capital UK not only acquired customers in the USA without permission to operate in this country. The flavor of the case is added by the fact that one of them lost over 280. USD, of which over 241 was a broker commission.

Gain Capital UK is the owner of the City Index and Forex.com brands. Once again, however, it turns out that even well-known brokers go to dirty play. Gain Capital UK, and precisely the London branch of the company, must pay a fine in the US. It was founded by the American Commodity Futures Trading Commission (CFTC), an independent agency designed to regulate the futures market and protect it against abuse. Meanwhile, such abuse occurred on the part of the British company for several years.

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Gain Capital Uk without a license for years

It turned out that from February 2014 to March 2019, Gain Capital UK Limited did not have permission to trade currency pairs in the USA. Non-American customer advisor has repeatedly acquired clients from the United States of America.

And you have to admit that he was effective and brought a lot of profit to the company. However, the record loss of one of the clients was 280. USD and after his information an investigation began, which proved not only that the broker did not have an American license, but he made great money on the failures of his clients. From a person who lost 280 thousand USD, as much as 241 671 USD went to the broker as part of the commission.

Gain Capital UK record-breaking penalties

After the negotiations, exactly this amount of commission will be paid by Gain Capital UK Limited to a US customer as compensation. In addition, 250 USD a fine that she imposed for illegal activities Commodity Futures Trading Commission (CFTC).

Gain Capital UK Limited also assured that it knows about much larger penalties if it continues to operate in the United States in the future without the appropriate licenses.

You cannot operate in the USA without the consent and official registration with the CFTC, SEC or banking supervision. Any broker or brokerage house wishing to attract clients from America's most powerful country must apply for a license. Regardless of the country in which it is located - the nationality of the client living in the USA is important. Otherwise, you risk facing the penalties that have just been imposed.

The fact that CFTC can be severe is best demonstrated by the case from mid-2019. At that time, the US financial commission announced a record fine imposed on a private individual. Michael Shah had to pay as much as USD 22 million. Much? The CFTC wanted him to pay USD 75 million, but the amount was reduced by the court. Shah was the originator and manager of Zimil Inc., which persuaded customers from the USA to binary options. To this end, she conducted aggressive marketing activities. Among other things, it has been proven to send over 60 million emails with platform advertisements on which binary instruments could be traded. In the e-mails the aspect of possible losses was ignored, but there were video materials with people who allegedly were supposed to earn huge amounts in this way. It turned out, of course, that they were hired actors who had practically nothing to do with financial markets, except that they were given a full payment for their tasks. The investigation lasted many months, but the verdict was passed after only three hearings, which in the USA caused a wave of criticism and accusation of excessive length of proceedings. In Poland, similar cases of smaller caliber usually last for many years.