Forex platform OctaFX India settles case with SEBI

Forex platform OctaFX India settles case with SEBI

Tauga Private Limited (formerly OctaFX India Private Limited) has reached a settlement with the Securities and Exchange Board of India (SEBI). Under the terms, OctaFX paid Rs 32 lakh and surrendered its broker registration with SEBI. It will be ineligible to apply for any SEBI registration for five years from the settlement date and barred from buying or trading in the securities market for one year.

Based on the information received, SEBI requested BSE to investigate OctaFX’s activities, alleging it operated an unregulated online trading platform for forex derivatives. BSE submitted its report to SEBI via email on March 14, 2022. SEBI’s further examination revealed that OctaFX India,  SEBI-registered stock broker—and its directors were linked to an unauthorized forex trading platform octafx.com and OctaFX trading app.

SEBI found that OctaFX concealed and denied any connection with the unauthorized platform, indirectly promoting it. Additionally, the company failed to inform SEBI or BSE about Enforcement Directorate (ED) raids at several of its premises. Following the inquiry, SEBI appointed a designated authority to investigate potential violations of the SEBI Act and its regulations. After the report was received, SEBI issued a Show Cause Notice. OctaFX then filed a settlement application under SEBI’s consent mechanism, agreeing to resolve the matter without admitting or denying SEBI’s findings.

The ED accused OctaFX of generating Rs 800 crore through unauthorized forex trading and misleading investors with promises of high returns. According to the ED, hundreds of investors across India were defrauded. This investigation was spurred by a complaint filed at Shivaji Nagar police station in Pune. The ED’s probe revealed that OctaFX, together with MS OctaFX India Private Limited, operated in India without authorization from the Reserve Bank of India (RBI). Funds from investors were sent through mule accounts and shell companies using unauthorized payment gateways, using advanced masking techniques to evade regulatory detection.