Global FX trading is estimated to have reached $4tr a day, but frauds in retail FX markets have proliferated. The CFTC has imposed various controls, including decreeing that retail investors may borrow up to 50 times their collateral to trade major currency pairs and 20 times for minor ones.

Chilton also called for better regulation of high frequency trading. In an article in the Financial Times on September 7, Chilton trod a middle path between participants who claim that HFT is a purely benign influence on markets, and critics who call for a strict clampdown.

He concluded that without HFT the price swings in the May 6 ‘flash crash’ would not have been so volatile, and he could not rule out that some HFT players had tried to profit from the dislocation.

“There is a good argument to be made that ‘parasitical trading’ does not truly contribute to fundamental market functions,” he said. “While I am not saying all high frequency trading is bad for markets, I think there is a great possibility that some of it is.”