Криминал На Форексе

“Oh what a tangled web we weave. When first we practice to deceive”.

Sir Walter Scott’s comment could have been made about the LIBOR and foreign exchange (forex) scandals engulfing the world’s largest banks.

For the first time, it looks like the banks in question may have to face criminal charges for manipulating forex benchmarks, instead of the civil settlements and huge penalties they have agreed up to this point in time. How did we get here?

Imagine if you had a good friend who came to you saying that he/she was short of cash and was selling an investment property. An agent was coming around today to value the property and he would offer it to you at the valuer’s price, if you could proceed right away, they needed the money as fast as possible. You know the property, have a bit of ready cash and agree, for a friend.

What have you done? You have bought a property for an unknown price that you don’t really want so will have to sell again. The house price may go up but also may go down before you sell it. And what about the sales costs? You have taken a lot of risk, for not a lot of return, except friendship. This is not a very “rational” investment.

Believe it or not that is what the masters of the universe on the world’s forex trading desks were doing. No wonder they ran into trouble.

Why do it?

While there are very many similarities between the LIBOR, and forex scandals, not least the deplorable behaviour of market traders and brokers amid the failures of senior management and regulators to detect and manage this bad behaviour, there is a fundamental difference between the two scandals that is important.

The LIBOR scandal was about traders who held large positions in Interest Rate Swaps (IRS) setting benchmark rates that advantaged themselves at the cost of their customers. Basically it was greed.

To an extent, the same is true of the forex traders who manipulated the internationally used WMR “4 o'clock fix” benchmark, often shortened to the “Fix”. But unlike LIBOR, the Fix was not set by guesswork but by actual trading in the market.

While not condoning the abominable behaviour of the forex traders who manipulated the Fix, they have an argument that “it was the market made me do it”, a juvenile argument of course but one that is economically rational.

The forex market is huge, with a turnover of some US$ trillion worth of currencies each trading day. The World Trade Organization (WTO) estimates that the total annual trade in goods and services between countries in the world was some US$17 trillion, in This means that the foreign exchange market turns over 80 times the total of global trade exports in one year. What is the economic purpose of the almost 99% of foreign exchange trading that is not related to commerce between countries?

To some extent (but not all), a large chunk of that trading is our obsession with global equities markets. Many of us (wittingly or unwittingly through our super/pension funds) are invested in equities that are denominated in US$, Euros, Yuan and so on, and there is a need to move money between these currencies each day and also to “revalue” our holdings on a regular basis.

The largest pension funds are “friends” with the world’s forex dealers as they have to trade billions of dollars of equity transactions with one another each day. In fact, in many cases, they are very close friends indeed being part of the same large banking group, for example, NAB and MLC. (Note: neither of these organisations has been implicated in manipulating the Fix).

In order to keep business with asset/fund managers, the forex market has over time engaged in a very irrational trading practice, in that they have agreed to buy/sell currency for asset managers “AT FIX”, i.e. the price at the Fix. They have, like our “friend” above, bought something they didn’t really want for a price that they don’t know yet and must get rid of it pretty quickly or they might make a loss if the market moves suddenly. This is really a “no win-no win” situation.

So what to do? If you could find “another friend” who was in the opposite position and wanted to buy when you wanted to sell, you could just agree to swap and everyone would happy, even though neither of you have made money on the deal. But the customers are happy.

Unfortunately, the “friend” in this case is another Forex dealer in another bank and technically you are not allowed to talk to him/her under the rules of the industry self-regulator, the Association Cambiste Internationale (ACI), also known as the Financial Markets Association (FMA).

But you talk to your friends all the time, you meet for drinks in the local pub, and chat to each other via internet chat rooms that you set up to boast about your golf handicaps. Pretty simple, you scratch my back this time and I will scratch yours next time.

And that’s how it starts. Soon you are talking to “friends” every day, helping each other out and even inviting more friends into the chatrooms to help them out too. The market is working as it should be if the rules are being bent a little bit.

But even though your friends are very helpful, sometimes there is a gap and there is a risk you have bought something you can only sell at a loss. What if the Fix could be nudged just a little bit to reduce the risk? Maybe a friend could put in a buy/sell order just before the Fix to nudge the Fix in the “right” direction? And if you knew this was going to happen why wouldn’t you tell your friends in the chat room about the “nudge”, and they can make a bit on it to compensate them for the risk they took on buying/selling “AT FIX”.

A slippery slope

By now of course, you have well and truly crossed the line between levelling out the market and manipulation and filled with bravado you name your chat-rooms with outlandish names like “the Cartel”, the “Bandit Club” and the “Mafia” – boys will be boys.

And once it became known that the Fix could be fixed, all sorts of misbehaviour started, such as deliberately triggering client’s “stop loss” orders. The US regulator the Commodity Futures Trading Commission (CFTC) gives an example of some of the shenanigans by a HSBC trader, as if that particular bank needs more bad publicity.

It is obvious that, in the beginning, the use of “At Fix” trades was not very rational but it could be seen as helping cement client relationships but as the practice grew it became economically unsustainable to give everyone the same break. Rather than address the irrationality/stupidity, however, some Forex traders went over to the dark side, first plugging the gap then taking advantage of the illicit opportunity to make profits.

Meanwhile, bank management reaped the profits and regulators were blissfully unaware. The traders were to blame but the “system” was at fault and to fix that there must be systemic regulation. Nor is it only LIBOR and the Fix, commodity benchmarks also appear to be under attack. Regulators need to stand back and understand the market and social pressures that traders work under to close loopholes like benchmark manipulation in the market.

With Forex trading, sending money to any part of the world is easy for people, so this sector is often developing. However, the popularity of this sector brought money laundering and terrorist financing risks. Since financial criminals use the money transfer and foreign exchange sector to carry out their illegal activities, the risks of anti-money laundering (AML) in this sector have increased considerably.

What Is Forex (FX) Trading?

Forex (foreign) Trading is the exchange of different currencies in a global market without a center. The foreign exchange market is the most traded financial sector globally, with a maximum of 5 trillion per day turnover. FX trading involves the simultaneous buying and selling of world currencies in this market.

Exchange rates indicate that another currency will replace one currency. It plays a vital role in the business world, as products or services purchased in a foreign country must be paid to use its currency. FX trading is preferred quite frequently due to its convenience. The foreign exchange market is mainly used by central banks, companies, retail traders, and banks.

Forex traders in the forex market are usually banks and fund managers. Besides, corporate company merchants also trade in the financial market. These traders may not think of physically withdrawing the coins right away, or they may not immediately consider currency trade, but they speculate about turning future currency fluctuations into opportunities. In other words, they invest and wait for the currencies that they think will become stronger in the future.

How Does Forex Trading Work?

Unlike stocks, 4x Trading takes place in an over-the-counter (OTC) market, directly between the two sides, not on exchanges. 4x is traded with currency pairs such as Singapore and US dollars (SGD/USD). You predict whether the price of one country's currency will rise against another, and you will take action accordingly.

In currency pairs, the first currency is called the base currency, while the second currency is called the counter currency. When 4x Trading estimates whether the base currency's price will rise against the counter currency. For example, if SGD is thought to rise against the USD, the currency pair is purchased, but vice versa. The currency pair is sold if the SGD is thought to drop against the USD.

The 4x market is managed by a global bank network spread across the four best foreign exchange centers at different time frames: London, New York, Sydney, and Tokyo. Due to the lack of a central location, 24 hours of 4x Trading can be done. There are some different types of 4x trade:

•  Futures forex market: A contract is decided to be resolved at a certain date due to the purchase and sale of a certain currency at a certain price.
•  Future forex market: An agreement is to buy and sell a certain currency at a future price and date. This contract is legally binding.
•  Spot forex market: The physical change of a currency pair that takes place at the point where the trade is made in a short time.

Money Laundering Risk For Forex Trading

It has become a potential target for financial criminals due to the preference and growth of 4x Trading. So this Trading offers huge growth opportunities for criminals. For this reason, regulations in this area have increased considerably. For instance, in the last decade, essential regulations regarding 4x Trading have been made in the USA and England. These regulations have important implications for how they use customers for 4x platforms. Therefore, to detect AML, the 4x sector should be aware of important AML/CTF vulnerabilities related to their services.

Due to the complexity of regulations in different international jurisdictions, as FX trading does not have a single center, a deficit occurs for money laundering in this sector. Moreover, many people use multiple currencies through multiple companies in forex trading. Therefore, FX trading involves risks due to several difficulties in tracking money. Besides, in 4x Trading, it is exposed to AML risks due to inequality between regulatory standards in different jurisdictions.

The differences in AML/CFT regulations between countries and the lack of communication between international financial authorities create criminal financial opportunities. Moreover, Trading offers some anonymity to traders, providing financial criminals a chance to perform money laundering activities. Financial criminals can complete transactions below the thresholds set by regulators anonymously; they are not subject to Customer Due Diligence (CDD) processes.

The Effect of Regulations on Forex Trading

Because of the severe AML risks that Trading has, businesses that carry out this transaction have to comply with AML regulations. In addition, these transactions in one day significantly increased the money laundering activities in this area. Since 4x Trading is a global activity, there are no regulations that comply directly with 4x platforms. However, traders are subject to many regulations depending on their regions. For businesses, the most common regulations are Know Your Customer (KYC) procedures. These regulations require companies to take due care of their customers.

With KYC procedures, businesses can verify their customers' identity and identify customer risks with Customer Due Diligence (CDD) procedures. As with other financial institutions, if forex businesses do not comply with these regulations, and if money laundering and terrorist financing are committed in foreign exchange transactions, regulators will take criminal action against companies.

Forex Trading Red Flags

Customers who hide their identity, send the vehicle to act on their behalf, Politically Exposed Persons (PEPs), and those in a law enforcement investigation are red flags. Some transactions are also referred to as red flag indicators, such as many money transfers, structured transactions involving multiple linked transfers in different countries, transactions in unusual situations, transactions with high-risk countries or online gambling sites, and transactions with non-profit organizations are red flag indicators.

Red Flag indicators can be determined by the Customer Due Diligence (CDD) procedures applied to the customers, as stated by the regulators' suggestions and Transaction Monitoring and Screening procedures for instant control of transactions. After they are determined, these transactions are reported and reported to the required institutions.

How to Prevent AML Risks in Forex Trading?

By complying with the AML Compliance Program determined by the regulators, businesses in this sector can avoid money laundering risks. However, complying with this program manually is not enough to detect crimes, and it is quite time-consuming.

To meet the AML/CFT requirements, trading programs are applied to Forex Trading companies' employees. The AML officer, who is generally in the business, carries out this Trading. Thus, the team's awareness is encouraged. However, this Trading is not sufficient to prevent these risks. That's why companies in Forex trading have to implement appropriate AML software and automate compliance processes to manage AML risks.

Get a real-time overview of how world currencies are traded against each other at Forex HeatMap.

Sanctions Scanner guides money-laundering crimes for all organizations, large or small. With our AML solutions, organizations can easily comply with the AML Compliance Program set by regulators, thus avoiding regulatory penalties. With powerful API support, organizations automatically perform AML control processes in seconds. Sanctions Scanner has essential lists such as global sanctions, PEP, and Adverse Media. Organizations can check their customers 24/7 in an instantly updated database. 

What is Forex?

The foreign currency exchange market, known as the Forex market (FX) is the world’s largest trading market, dwarfing the Stock Exchange in size with nearly $5 trillion US dollars traded daily. The market is open 24 hours a day, when trading closes in New York it opens again in Tokyo and Hong Kong. Currencies are always traded in pairs, for example, the US$ with the UK£ or the US$ with the EURO. With constant price fluctuations, this tumultuous market can make Institutions, companies and some individuals a great deal of money.

Most of Forex trading happens in the spot FX market, which is different from the futures market, in that currencies are physically exchanged in real-time when a transaction is made. Whereas in the futures market, the date the trading price is determined and the date the currency is exchanged are different. When a holiday-maker goes to their bank to exchange foreign currencies they are participating in the spot FX market.

Giambrone & Partners' banking and financial lawyers point to the following features of the Forex market that make it susceptible to Forex trading scams and Forex frauds:

• There is no regulated centralised exchange. 
• Currencies are traded via computer networks between one trader and the next, often referred to as over-the-counter (OTC).
• The Forex market is a high-leverage market. This is basically a loan by the broker to the trader allowing the trader to trade at a margin. A typical margin ratio will be around , or depending on the amount of currency being traded. At the trader only needs to put up £ to cover a £, trade. The reason brokers provide such high leverage is because currency fluctuations in the Forex market are not usually more than 1% during any trading. However, even with small fluctuations, high leverage attracts inexperienced traders who may think the Forex market is a get rich quick market.

Is Forex a scam?

The Forex market is a legitimate trading market where the world’s currencies are traded. It is not a scam in itself. Without the Forex market it would be difficult to trade the currencies needed to buy imports, sell exports, to go on holiday or carry out cross-border business. However, with high leverage positions which, in theory, have the potential to generate significant money for traders and because there is no centralised/regulated exchange, scammers take advantage of the lack of regulation to target the inexperienced traders who desire to enter the market.

The Forex market is a ‘zero-sum’ market, which means that for one trader to make a profit, another trader will need to make a loss, the Forex market does not itself add value to the market. Because most of the currency movements are directed by large well-financed corporate institutions and banks, that have a complete understanding of the financial markets, the undercapitalised trader is always likely to eunic-brussels.eu such Institutions and large banks that trade in Forex on a daily basis.  In order to make a significant profit in the market takes a considerable experience and is a steep learning curve.

Giambrone recognises that scammers take advantage of the complexities around the Forex market, maliciously withholding important information about market realities from their unsuspecting novice victims, claiming their scheme, information or software robot will bring them financial success.

Forex scams

The following outlines Forex scams and the types of  scam that have been involved in Forex frauds at present and in the past.

Signal sellers

The signal seller scam is a scam that works by a person or a company selling information on which trades to make and claiming that this information is based on professional forecasts which are guaranteed to make money for the inexperienced trader. They usually charge either a daily/weekly or monthly fee for this service but do not offer any information that helps the trader make money. They will usually have a slew of testimonials from allegedly legitimate sources in order to gain the trader’s confidence yet in reality do nothing to forecast profitable trades.

High yield investment programmes

High yield investment programmes (HYIP) are frequently just a form of Ponzi scheme in which a high level of return is promised for a small initial investment into what is in fact a Forex fund. However, in reality, the initial investors are being paid back from the money generated by the current investors and a constant flow of new investors is required to keep the funds flowing, once there are no more investors in the scheme the owners usually close it down and take all the remaining money.

Manipulation of bid/ask spreads

These types of scams have decreased over the years yet they are still around. This is why it is important to choose a Forex broker who is registered with a regulatory agency. These type of scams would normally involve having spreads of around pips instead of between pips which is the norm.

Scams through software

Forex robot scammers lure novices with the promise of big gains from little effort or knowledge. They may use of fake or misleading figures to convince customers to buy their product. Their promises are flawed as no robot can adapt and thrive in all environments and markets. Software is generally used by professionals only to analyse past performance and to identify trends. All software should be formally and independently tested but caution is required when trusting the reviews themselves as these can be paid for. If their product did exactly what they claimed then they would not be selling it but instead using it exclusively themselves.

Managed accounts

These accounts can be a type of Forex scam and there are many examples of managed accounts. These scams often involve a trader taking your money and instead of investing it, they use it to buy all sorts of luxury items for themselves. When the victim eventually asks for their money back there is not enough money left to repay.

Ponzi and pyramid schemes

These are very common forms of affinity fraud. They promise high returns from a small initial investment up front. The early investors usually do gain some sort of return on their money and motivated by their perceived success they then recruit their friends and family into the scheme. However, the truth is that the ‘investment opportunity’ does not actually exist and their initial return is being funded by money paid in by other members of the scheme. When the investor numbers start to drop the scammers close the scheme and take the money.

Boiler room scams

This type of scam involves the scammers usually getting people to buy shares in a worthless private company on the promise that when the company goes public their shares will increase substantially. They depend on using "urgency" - suggesting that an opportunity will be lost if they do not act quickly which prevents the target from being able to research the opportunity properly. However, often the company doesn’t really exist and may have a fake telephone number, office and website. Once the scammers have made all the money they can, they will disappear with everyone’s investments.

How do I spot Forex scams?

The single most important thing an individual can do to avoid being scammed is to actually learn to trade on the Forex market properly. The difficulty in this however is finding trustworthy brokers/teachers of Forex that can be trusted. The amateur must know that the broker has actually made the money he/she says they have, due diligence is the key here. The Forex market is not a casino but a very serious market where trillions of currency units are traded daily. Use demo accounts and learn to make long term profits first before trading for real. Be aware that like any professional skill, it can take years to master the Forex trade properly. Any claim that says ‘you can make money quickly’ should be avoided.

Paul Belougour, managing director of a retail Forex trading company has gone as far as to say, “if this is money you have worked hard for – that you cannot afford to lose – never, never invest in foreign exchange."

Do not take at face value the claims that are made, take the time to make your own analysis. An inexperienced trader should be critical in their approach, analysing statistics and making their own functions that they have tested and had success with on a demo account first. This will take time to achieve but will serve the inexperienced trader better than trusting an automated computer program. Do not be rushed into a "too good to be true" investment.

Other things a person might want to check is the authenticity of the company making the claims or selling the expertise/course. To do this check the location/jurisdiction where the business is registered, as a lot of Forex scammers will trade from a location where they believe the local law will make it hard for them to be prosecuted internationally.

What do I do if I have been scammed?

If you have been scammed report the scam to the appropriate authority. For the UK go to eunic-brussels.eu

As well as doing this it is also a good idea to tell your story to the Forex community so that other individuals do not fall foul of the same scam. 

How can Giambrone & Partners help me if I have been scammed?

Giambrone & Partners is a leading mid-size international law firm with a team of experienced lawyers specialising in Forex fraud. Giambrone & Partners assists victims of Forex fraud in civil and criminal actions against unregulated Forex companies, online internet fraudsters and pyramid schemes created on a Ponzi-style structure. Giambrone & Partners also specialises in legal actions against Binary Options trading companies.

Giambrone & Partners' Forex lawyers have recently been involved in:

Retrieving more than £ million from the Traders International Return Network (“TIRN”)

TIRN promised high yield returns of between 9% – 22% by using “professional money managers” investing in the Forex market. Yet in reality none of the trader’s money was invested in the market and TIRN’s operators misappropriated around US$15 million for their own personal benefit.

Giambrone & Partners advise investors caught in Finanzas Forex's scam

Giambrone & Partners' Forex lawyers have been advising investors from Italy, Spain, Portugal, Malta, Scandinavia, Latin America (Brazil, Argentina, Columbia, Equador and Mexico) who have been victims of Finanzas Forex and the related Evolution Marketing Group (“EMG”). Finanzas Forex is now in liquidation and Giambrone is continuing to help traders recover funds from the perpetrators of this scam.

Giambrone & Partners' Forex lawyers are also representing traders and investors in collective legal actions in relation to Telexfree, AGF Markets, LBinary, NRGbinary and others.

Giambrone & Partners makes the process of starting your claim straight forward

All that a victim of a Forex scam has to do to start a claim is to complete an online claim form and send it back to Giambrone.& Partners

To start your claim now click here

Giambrone & Partners continues to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable.

If you are a victim of online fraud / scam or have lost funds with a Forex broker through no fault of your own, please contact our Client Services Team to arrange a discussion with a lawyer in the Forex Trading Litigation team. Our international lawyers are able to provide assistance in English, French,  Italian, Spanish, German, Arabic and Chinese. 

Alternatively, please click here to file an enquiry form online, 

By: Dana M. Grimes, Esq.

The FOREX Market

Of the various types of fraud cases that we see in criminal practice, foreign exchange fraud stands out as the type of case in which the

International Currency for FOREX Trading &#; Photo Courtesy of eunic-brussels.eu

investors have no chance from day one, because of the zero-sum nature of foreign exchange trading.  The investor is convinced to become involved in an investment with the foreign exchange market (&#;FOREX,&#; the decentralized, global financial market which determines the relative values of different currencies).  The investor is lured in by the fact that the FOREX market is the most liquid market in the world, and the use of leverage in the market can theoretically wildly enhance profit margins with respect to account size.

The investor is passed off to an &#;introducing broker&#; (&#;IB&#;).  The IB houses the money and (in theory) sends it to a futures commission merchant (&#;FCM&#;).  Sometimes the fraud is simple enough that the money is never sent to an FCM.  It is simply spent and reported back to the investor as lost in the volatile market.  But if it is sent to the FCM, the IB and the FCM have a contractual relationship.  A trader then gets involved in the picture.  He facilitates trades through a bank (often a foreign bank) to purchase commodity pairs.

For example, if the investor is convinced to trade the dollar versus the peso, the trader buys that pair.  In the typical trade, when a trader buys a pair of dollar versus the peso, he is buying the dollar and selling with the peso,or vice versa.  In the foreign exchange market, there is no chance of a rising market.  In every trade, there is a winner and a loser, that is why it is zero-sum. It is actually less than zero-sum when you account for the commissions of the traders, which are often substantial and, in many fraud schemes, hidden from the investors.  Often con-men promise victim investors wild returns and claim to be able to minimize the risk of the market because of sophisticated trading techniques and abilities to stop or cap losses at a certain level.  However, because of the volatility and liquidity of the market, these purported risk-minimizing techniques are usually not actually possible to have in place.

Compounding the risk, individual retail traders are by definition under-capitalized such that even if it were a level playing field between an investor and a multinational bank, when two traders continue trading until one trader goes bankrupt, the investor with less capital has a higher probability of going bankrupt first.  The retail investor is playing against the enormously capitalized market as a whole (daily turnover is estimated at $2 trillion, 20 times the value of equities traded on the world&#;s stock exchanges), so in the long run he will almost certainly go bankrupt.

Also, even though extreme leverage makes FOREX trading very risky, regulation of the industry is limited.  That is another part of the reason the industry is ripe with fraud.  The Commodities Futures Trading Commission (&#;CFTC&#;) is the federal watch-dog tasked with regulating the futures and commodities markets.  The CFTC, along with the SEC, oversee the National Futures Association (&#;NFA&#;), a self-regulated federal entity that regulates the futures and commodities markets.  None of these U.S. organizations have the investigative ability or manpower to closely monitor the industry and no international body regulates this global commerce.

FOREX Fraud vs. Other White Collar Fraud

Real estate fraud comes in various forms.  Sometimes the investors are attempting to invest in an equity position in the purchase and construction of real estate projects and the loss of their funds becomes a criminal case when the principals in the company make material misrepresentations to the investors and then spend the money on yachts and trips to Europe instead of on the project sold to the investors.  In mortgage fraud, lenders are often the victims of fraudulent loan applications and/or appraisals.  In either scenario, however, a rising real estate bubble can protect both the victims and the perpetrators.  In a rising real estate market, if nobody loses money, criminal misrepresentations are less likely to be uncovered and prosecuted.

There are likewise a variety of species of stock market fraud.  Some cases involve misrepresentations by corporate officers of assets and liabilities, even of large companies on the major exchanges, such as Enron.  In Skilling v. United States () U.S. , the Supreme Court read the &#;honest services&#; portion of the federal fraud statutes in a way which has deterred prosecutors from bringing honest service fraud charges against corporate executives whose conduct did not involve the receipt of bribes or kickbacks.

Although the regulators of the exchanges are often asleep at the switch (as was the SEC in the Bernie Madoff case), there is even more stock fraud in the pump and dump cases of Penny Stocks, which are not traded on the major exchanges.  There is also widespread insider trading, a good example of which is the Galleon Group Hedge Fund case.  Its president, Raj Rajaratnam, was already a billionaire, but the United States Attorney for the Southern District of New York proved that to increase his wealth (and that of his investors), he was paying a network of insiders to trade on companies including Google, Goldman Sachs, and Hilton Hotels.  There have been about 50 other convictions of insider trading in that case alone, and some observers feel that it is representative of just the tip of the iceberg in the lightly regulated hedge fund field.

FOREX Prosecutions

Federal law enforcement typically works up FOREX cases.  They can originate in a CFTC complaint and wind up on the desk of the FBI.  Depending on the amount of loss involved, the FBI may take the case to either state or federal prosecutors.  Federally, these cases are usually charged as wire and mail fraud.

On the state side, we have seen these cases prosecuted in a very straightforward way as grand theft cases.  Penal Code § in essence criminalizes taking the property of another with the intent to permanently deprive them of the property.  The crimes of larceny, embezzlement, larceny by trick and device, and obtaining property by false pretenses are all varieties of grand theft.  See, People v. Creath () 31 eunic-brussels.eu4th ,   The main issue in these cases is the intent of the defendant, i.e., was he a bad or reckless trader with a high commission arrangement, or a con-man who made material misrepresentations to investors with the intent to permanently deprive them of their money rather than the intent to gete them a return on their investment?

These cases can be charged as conspiracies to defraud, which occurs when &#;two or more persons conspire . . . cheat and defraud any person of any property, by means which are in themselves criminal, or to obtain money or property by false pretenses or by false promises with fraudulent intent not to perform those &#;promises&#; pursuant to Penal Code § (a)(4).  Along with grand theft, the prosecutor may allege &#;great taking&#; enhancements, under Penal Code §§ (a)(2) and (a)(3).  Attorneys defending these cases should also take note of the California Corporations Code, which has defined within its somewhat dense and dry language a plethora of ways in which a person can commit commodities fraud.  Of particular noteworthiness is Corporations Code § , which in essence criminalizes a defendant&#;s direct or indirect involvement in the sale of a commodity with the intent to defraud.

Conclusion

At the outset of these criminal cases, brokers and traders  in FOREX cases usually assert that the claims of angry investors are, if anything, a civil matter.  They may contend &#; somewhat indignantly &#; that a variety of carefully-crafted out-of-state corporations shield them from any personal civil liability, and certainly any criminal individual liability.  However, officers, directors and managers of corporations are criminally liable for the crimes they personally commit, authorize, or ratify on behalf of the business entity.  See, Horse Ranch, Inc. v. Superior Court () 24 eunic-brussels.eu4th ; see also, People v. Mathews () 7 eunic-brussels.eu4th ,

The real battleground in these cases almost inevitably concerns the evidence of the defendant&#;s promises, projected returns, and clarity (or lack thereof) regarding the commission structure with the named victims.  Evidence of misrepresentations, combined with sometimes devastating losses to victims, can make taking these cases to trial a risky proposition for the defense.  Not nearly so risky of a proposition, however, as getting involved in the FOREX market as an individual retail investor.  Even when sophisticated equity traders engage in these trades, they realize that they are not truly investing, they are speculating.  There is no chance for the average investor to make money in these transactions, competing as they do with such an information disadvantage to banks, major corporations and hedge funds that make up the vast majority of the players in the market, and especially after the various commissions are subtracted by unscrupulous brokers from any winning transactions.

Financial scandal

Parts of this article (those related to talk) need to be updated. Please help update this article to reflect recent events or newly available information.(August )

The forex scandal (also known as the forex probe) is a financial scandal that involves the revelation, and subsequent investigation, that banks colluded for at least a decade to manipulate exchange rates on the forex market for their own financial gain. Market regulators in Asia, Switzerland, the United Kingdom, and the United States began to investigate the $&#;trillion per day foreign exchange market (forex) after Bloomberg News reported in June that currency dealers said they had been front-running client orders and rigging the foreign exchange benchmark WM/Reuters rates by colluding with counterparts and pushing through trades before and during the second windows when the benchmark rates are set. The behavior occurred daily in the spot foreign-exchange market and went on for at least a decade according to currency traders.^[1]

Background[edit]

The foreign exchange market (forex) has been largely unregulated, because regulators considered it "too big to be manipulated".^[2]

Investigation[edit]

At the center of the investigation were the transcripts of electronic chatrooms in which senior currency traders discussed with their competitors at other banks the types and volume of the trades they planned to place. The chatrooms had names such as "The Cartel", "The Bandits’ Club", "One Team, One Dream" and "The Mafia".^[5][6][7] The discussions in the chatrooms were interspersed with jokes about manipulating the forex market and repeated references to alcohol, drugs, and women.^[8] Regulators were particularly focusing in on one small exclusive chatroom which was variously called The Cartel or The Mafia. The chatroom was used by some of the most influential traders in London and membership in the chatroom was highly sought after. Among The Cartel's members were Richard Usher, a former Royal Bank of Scotland (RBS) senior trader who went to JPMorgan as head of spot foreign exchange trading in , Rohan Ramchandani, Citigroup’s head of European spot trading, Matt Gardiner, who joined Standard Chartered after working at UBS and Barclays, and Chris Ashton, head of voice spot trading at Barclays. Two of these senior traders, Richard Usher and Rohan Ramchandani, were members of the member Bank of England Joint Standing Committee's chief dealers group.^[9]

At least 15 banks including Barclays, HSBC, and Goldman Sachs disclosed investigations by regulators. Barclays, Citigroup, and JPMorgan Chase all suspended or placed on leave senior currency traders. Deutsche Bank, continental Europe’s largest lender, was also cooperating with requests for information from regulators.^[9][10] Barclays, Citigroup, Deutsche Bank, HSBC, JPMorgan Chase, Lloyds, RBS, Standard Chartered, UBS and the Bank of England as of June had suspended, placed on leave, or fired some 40 forex employees.^{[7][11][12][13]} Citigroup had also fired its head of European spot foreign exchange trading, Rohan Ramchandani.^[14]Reuters reported hundreds of traders around the world could be implicated in the scandal.^[15]

Effects[edit]

As of December , the monetary losses caused by manipulation of the forex market were estimated to represent $&#;billion per year for Britain’s &#;million pension holders alone (£B/year).^{[16][failed verification]} The manipulations affected customers all around the world, for over a decade. The manipulations' overall estimated cost is not yet fully known.

Fines[edit]

On 12 November , the United Kingdom's Financial Conduct Authority (FCA) imposed fines totaling $&#;billion on five banks for failing to control business practices in their G10 spot foreign exchange trading operations, specifically: Citibank $&#;million, HSBC $&#;million, JPMorgan $&#;million, RBS $&#;million and UBS $&#;million. The FCA determined that between 1 January and 15 October the five banks failed to manage risks around client confidentiality, conflict of interest, and trading conduct. The banks used confidential customer order information to collude with other banks to manipulate the G10 foreign exchange currency rates and profit illegally at the expense of their customers and the market.^[20] On the same day the United States Commodity Futures Trading Commission (CFTC) in coordination with the FCA imposed collective fines of $&#;billion against&#;the same five banks for attempted manipulation of, and for aiding and abetting other banks’ attempts to manipulate, global foreign exchange benchmark rates to benefit the positions of certain traders. The CFTC specifically fined: $&#;million each for Citibank and JPMorgan, $&#;million each for RBS and UBS, and $&#;million for HSBC.^[27]

The CFTC found that currency traders at the five banks coordinated their trading with traders at other banks in order to manipulate the foreign exchange benchmark rates, including the WM/Reuters rates. Currency traders at the banks used private chatrooms to communicate and plan their attempts to manipulate the foreign exchange benchmark rates. In these chatrooms, traders at the banks disclosed confidential customer order information and trading positions, changed trading positions to accommodate the interests of the collective group, and agreed on trading strategies as part of an effort by the group to manipulate different foreign exchange benchmark rates. These chatrooms were often exclusive and invitation only.^[27]

On 20 May , the five banks pleaded guilty to felony charges by the United States Department of Justice and agreed to pay fines totaling more than $&#;billion. Four of the banks, including Barclays, Citigroup, JP Morgan, and Royal Bank of Scotland pleaded guilty to manipulation of the foreign markets; while the others had already been fined in settlements from the November investigation, Barclays had not been involved and was fined $&#;billion. UBS also pleaded guilty to committing wire fraud and agreed to a $&#;million fine. A sixth bank, Bank of America, while not found guilty, agreed to a fine of $&#;million for unsafe practices in foreign markets.^[28][29]

On 18 November Barclays was fined an additional $m for automated electronic foreign exchange misconduct.^[26]

Criminal proceedings[edit]

On 19 December the first and only known arrest was made in relation to the scandal. The arrest of a former RBS trader took place in Billericay, Essex, and was conducted by the City of London Police and the Serious Fraud Office.^[30]

Several traders have been incarcerated for market manipulation in recent years. The longest conviction was that of Tom Hayes; Hayes, a British citizen and ex-UBS trader, received a year sentence in ^[31]

Reforms[edit]

As of November , respective authorities announced remediation programmes aimed at repairing trust in their banking systems and the wider foreign exchange market place. In the United Kingdom, the FCA has stated that the changes to be made at each firm will depend on a number of factors, including the size of the firm, its market share, impact, remedial work already undertaken, and the role the firm plays in the market.^[20] The remediation programme was to require firms to review their IT systems in relation to their spot FX business, as the banks relied on legacy technologies that allow for the existence of dark-data silos within which manipulation is able to occur unnoticed by compliance systems.^[32]

In Switzerland, the Swiss Financial Market Supervisory Authority announced in December , that for a period of two years UBS would be limited to a maximum annual variable compensation to % of the basic salary for foreign exchange and precious metals employees globally. UBS was instructed to automate at least 95% of its global foreign exchange trading, while effective measures must be taken to manage conflicts of interest with a particular focus on organisational separation of client and proprietary trading.^[33]

As of May , the window in which the daily 4pm fix is calculated was extended to five minutes as recommended by the Financial Stability Board, a watchdog advising the G20 finance ministers and the Bank for International Settlements tried to get banks to agree a unified code of conduct.^[2]

See also[edit]

References[edit]

External links[edit]

Bank of America

Barclays

Citigroup

HSBC

JPMorgan

RBS

UBS

Government

Date: October 21,

Contact:[email protected]

Tampa, FL — U.S. District Judge William F. Jung has sentenced Michael J. DaCorta to 23 years in federal prison for conspiracy to commit wire fraud and mail fraud, money laundering, and filing a false income tax return. As part of his sentence, the court also entered an order of forfeiture in the amount of $2,,, a portion of the proceeds of the charged criminal conduct. A federal jury had found DaCorta guilty on May 4,

According to testimony and evidence presented during the day trial, from November through April 18, , DaCorta ran an investment company named Oasis International Group, Ltd. ("OIG"). DaCorta and his co-conspirators persuaded at least victims to invest in OIG through promissory notes and other means, causing victims' losses exceeding $80 million. DaCorta, who had effectively been banned from conducting foreign exchange trading ("FOREX") by agreement with the National Futures Association, induced victims to invest in OASIS by falsely representing to victim-investors that OASIS was reaping enormous profits by being a "market maker" and collecting "spread" on voluminous FOREX trades. DaCorta also pitched the opportunity as essentially risk free and Oasis as well-collateralized. In reality, Oasis was not making markets and had no true revenue. The "spread" earnings were being paid on each trade by OASIS back to OASIS in order to create the illusion of revenue, which was published to investors on fictious account statements and an online portal. The OIG investor portal showed the "spread" credits but concealed catastrophic underlying trading losses.

DaCorta and his conspirators used the balance of the victim-investors' funds to make Ponzi-style payments to perpetuate the scheme and to fund lavish lifestyles. For example, the evidence showed that DaCorta used victim-investors' funds to purchase a Maserati and Range Rovers for his family members, a country club membership, multiple million-dollar homes in Florida, college tuition for family members, flights on private jets, and lavish trips to Europe and the Cayman Islands. DaCorta also under-reported his income on his federal income tax return, claiming a negative income and receiving a tax refund.

"Mr. DaCorta guaranteed his more than clients an "oasis" of an investment, when in reality all they got was a dust bowl of empty promises," said Brian Payne, IRS-CI Special Agent in Charge. "Today's significant prison sentence ordered by the court should offer some measure of justice to all of those impacted by the destructive wake of Mr. DaCorta's greed and indifference."

"Mr. DaCorta surrendered to greed and swindled millions of dollars from honest, hard-working Americans," said FBI Tampa Field Office Special Agent in Charge David Walker. "Today's sentencing confirms the FBI's commitment to hold heartless fraudsters accountable for their actions and ensure justice is served."

This case was investigated by the Internal Revenue Service - Criminal Investigation and the Federal Bureau of Investigation, with assistance from the Commodity Futures Trading Commission, the National Futures Association, the Financial Industry Regulatory Authority's Criminal Prosecution Assistance Group, and the Florida Office of Financial Regulation. It was prosecuted by Assistant U.S. Attorneys Rachelle DesVaux Bedke and David W.A. Chee, and former Assistant U.S. Attorney Frank Murray.

Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation, announced today the unsealing of a Complaint in Manhattan federal court charging EDDY ALEXANDRE, the leader of a purported cryptocurrency and forex trading platform called EminiFX, with commodities fraud and wire fraud offenses.  As alleged, ALEXANDRE solicited more than $59 million in investments from hundreds of individual investors after making false representations in connection with the EminiFX trading platform.  ALEXANDRE was arrested this morning and will be presented later today before Magistrate Judge Katharine H. Parker in the U.S. District Court for the Southern District of New York.

U.S. Attorney Damian Williams said:  “Eddy Alexandre allegedly induced his clients to invest over $59 million with promises of huge passive income returns via his own proprietary trading platform called EminiFx. In reality, no such technology existed, as Alexandre is alleged to have invested very little of their money – most of which he lost – and transferred most of it to his own personal accounts to pay for luxury items for himself.  As in any of the financial markets, the foreign exchanges offer high return potential, but investors should beware of the downside risks of false claims and get rich quick schemes that oftentimes are too good to be true.” 

FBI Assistant Director-in-Charge Michael J. Driscoll said:  “As alleged, Mr. Alexandre solicited millions of dollars from unwitting investors to whom he ‘guaranteed’ weekly returns of 5% through his trading platform using a new technology he refused to disclose.  As with many greedy actors who have preceded him, he then used significant portions of the investor funds he solicited to buy expensive luxuries for himself.  Today's action again demonstrates the FBI's commitment to pursuing fraudsters like Mr. Alexandre and guaranteeing they face the consequences of their actions in the federal criminal justice system.”

As alleged in the Complaint unsealed today in Manhattan federal court[1]:

From in or about September , up to and including in or about May , ALEXANDRE, operated EminiFX, Inc. (“EminiFX”), a purported investment platform that ALEXANDRE founded, and for which he solicited more than $59 million in investments from hundreds of individual investors. ALEXANDRE marketed EminiFX as an investment platform through which investors would earn passive income through automated investments in cryptocurrency and foreign exchange (“FOREX”) trading. ALEXANDRE offered his investors “guaranteed” high investment returns using new technology that he claimed was secret. Specifically, ALEXANDRE falsely represented to investors that they would double their money within five months of investing by earning a 5% weekly return on their investment using a “Robo-Advisor Assisted account” to conduct trading. ALEXANDRE referred to this technology as his “trade secret” and refused to tell investors what the technology was. Each week EminiFX’s website falsely represented to investors that they had earned at least 5% on their investment, which they could withdraw or re-invest.

In truth and in fact, and as ALEXANDRE well knew, EminiFX did not earn 5% weekly returns for its investors. ALEXANDRE did not even invest the vast majority of investor funds entrusted to him, and ALEXANDRE sustained over $6 million in losses on the limited portion of funds that he did invest, which he did not disclose to his investors. Instead of using investors’ funds as he had promised, ALEXANDRE misdirected at least approximately $14,, to his personal bank account and failed to invest the vast majority of the investors’ funds. For example, ALEXANDRE used $, in investor funds to purchase a BMW car for himself and spent an additional $13, of investor funds on car payments, including to Mercedes Benz. 

*                *                *

ALEXANDRE, 50, of Valley Stream, New York, is charged with one count of commodities fraud, which carries a maximum sentence of 10 years in prison, and one count of wire fraud, which carries a maximum sentence of 20 years in prison. 

The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.

Mr. Williams praised the investigative work of the Federal Bureau of Investigation and also thanked the Commodity Futures Trading Commission for its assistance.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant United States Attorneys Nicholas Folly and Jared Lenow are in charge of the prosecution.

For months Europol and Eurojust, supported by investigators from Germany, Austria, Serbia, Ukraine, and Bulgaria, have been investigating what appears to be one of the largest Forex scams in Europe.

Arrests in connection with a large Forex scam branching out across Europe continue. Five suspects were arrested in Bulgaria in March, following nine arrests made in Bulgaria and Serbia in April and the seizure of €50 million in cars and luxury goods in Ukraine in December In February , a further arrest revealed the names of some of the fraudulent sites, which were subsequently shut down by the supervisory authorities.

The work of the European Union’s Agency for Criminal Justice Cooperation, Eurojust, supported by the European Union’s Law Enforcement Agency, Europol, and the local authorities of those countries involved, brought to light the existence of an organized crime group targeting Forex scams.

This criminal organization operated through the creation of pseudo Forex websites that simulated huge profits, inducing unsuspecting investors to trust them with their money.

The victims were mainly German-speaking online investors, but investors from other European countries had also registered on these sites.

The fictitious companies, fronted by their fake websites, operated mainly from Bulgaria and Ukraine.

At least victims have been identified, with a total of around million euros stolen.

The Investigations

The Public Prosecutor General in Bamberg, Germany initiated the investigation in and collected complaints from hundreds of victims from Germany, but also from Austria and the rest of Europe.

The work of the investigators revealed that this criminal organization had organized the scam by starting with a rather low request: the initial payment in fact ranged from to euros.

The type of investment advertised was financial instruments, such as binary options, cryptocurrencies, CFDs and foreign currencies. Once the first payment was made, the (fake) brokers, who were actually employed in call centers mainly located in Eastern Europe, came into play. They contacted victims in their own language in order to gain their trust.

Then, according to the script, it was a matter of making substantial initial profits, which were generated by misled online simulations and obviously constructed ad hoc. At this point, believing that they were obtaining a positive return, clients were induced over the phone, by supposedly specially trained brokers, to make larger investments.

The sad reality is that investments were never made, and the money was simply divided among the scammers. “The deposited funds are never used for capital investments, the trading platform visible to the customer, like the alleged customer account, is pure deception,” said the Bamberg Public Prosecutor General.

Investigators have speculated that there may be a high number of unreported cases because some of those involved may be unaware that they have been the victims of fraud. Since this is (alleged) trading in financial products, many investors will have thought that they lost their money in an “honest” way, as a direct result of a risky transaction.

April Action Day

As part of an operation prepared over many months, on April 2, (Action Day), investigators went into action in Sofia, Bulgaria and in Belgrade, Serbia. On this occasion, seven men and two women between the ages of 25 and 49 were arrested.

The Public Prosecutor General in Bamberg confiscated almost € million from an account with the payment service provider Wirecard.

At the time, it was a heavy blow for the scammers. In addition, this operation revealed that they had organized themselves into two organized groups. Those who were arrested were part of these two groups.

The first group allegedly operated a number of online trading sites:

• XtraderFX
• Cryptopoint
• SafeMarkets
• OptionGlobalStars

The other “gang” instead dealt with the management of:

• Trade Capital
• Fibonetix
• Nobel Trade

All of the sites in question have been blocked by the relevant authorities.

February German police had already flagged some of the companies involved

The names of some of these sites had already been flagged as part of another investigation in Europe, which had seen, in February in Bulgaria, the arrest of a key suspect who was part of a € million scam headed by a criminal group based also in Bulgaria.

It was in fact Austrian investigators who identified the following as “risk” platforms: XTraderFX, OptionStars, OptionStarsGlobal, GoldenMarkets, SafeMarkets, and Cryptopoint.

The modus operandi used was similar, but with some variations:

• The creation of fake trading platforms for financial instruments and cryptocurrencies;
• Guaranteeing victims safe investments;
• An alleged insurance against big losses;
• A series of impressive results, which were shown to the victims to encourage them to make further deposits;
• The choice, in some cases, to tell victims that they are at a loss, and to provide them with additional investments to cover themselves.

Meanwhile, the scammers would funnel the proceeds into companies that would actually launder the money.

Austrian police, who were the first to spot the Forex scam, said the group operated call centers, websites, and software companies to facilitate the scam, and used social media to lure victims from across Europe.

Platforms operated by the group included XTraderFX, Optionstars, OptionstarsGlobal, GoldenMarkets, SafeMarkets, and Cryptopoint. Most of the network infrastructure was located in Bulgaria and the Czech Republic.

On this occasion, the then Austrian Minister of the Interior, Herbert Kickl, praised the international cooperation, “This successful action,” he commented, “is a hard blow against cybercrime, where the perpetrators have access to state-of-the-art digital technologies.”

If you recognize the names of any of these companies or have traded with them, or if you have found yourself in a situation such as the one described, please do not hesitate to contact us. Our Forex Litigation lawyersare at your disposal for clarification and advice.

Calogero Boccadutri

Calogero Boccadutri is the Managing Partner of Boccadutri International Law Firm. He has trial experience in Forex, Personal Injury and Administrative litigation.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that EDDY ALEXANDRE was sentenced by U.S. District Judge John P. Cronan to nine years in prison for engaging in commodities fraud.  ALEXANDRE was the leader of a purported cryptocurrency and foreign exchange (“forex”) trading platform called EminiFX, and he defrauded over 25, investors in the EminiFX trading platform of more than $ million.

U.S. Attorney Damian Williams said: “Eddy Alexandre defrauded tens of thousands of ordinary investors of almost a quarter-billion dollars in his cryptocurrency investment scam.  Alexandre’s fraud was brazen and included fabricating weekly investment returns of at least 5% out of thin air and falsely claiming to use artificial intelligence trading technology that did not even exist.  Most egregiously, Alexandre recruited many of his investors by exploiting his position of trust within his church and the Haitian community, even going so far as to enlist members of the church to help recruit EminiFX investors.  As today’s sentence demonstrates, cryptocurrency executives who lie and cheat their customers will be held to account for their crimes.”

According to the allegations in the Indictment and other filings and statements made in court:

From in or about September , up to and including in or about May , ALEXANDRE operated EminiFX, Inc. (“EminiFX”), a purported investment platform that ALEXANDRE founded, and for which he solicited more than $ million in investments from over 25, individual investors.  ALEXANDRE marketed EminiFX as an investment platform through which investors would earn passive income through automated investments in cryptocurrency and forex trading.  ALEXANDRE offered his investors “guaranteed” high investment returns using new technology that he claimed was secret.  Specifically, ALEXANDRE falsely represented to investors that they would double their money within five months of investing by earning at least 5% weekly returns on their investment using a “Robo-Advisor Assisted account” to conduct trading.  ALEXANDRE referred to this technology as his “trade secret” and refused to tell investors what the technology was.  Each week, EminiFX’s website falsely represented to investors that they had earned at least 5% on their investment, which they could withdraw or re-invest.

In truth and in fact, and as ALEXANDRE well knew, EminiFX did not earn 5% weekly returns for its investors.  ALEXANDRE did not even invest a substantial portion of the investor funds entrusted to him, and ALEXANDRE sustained millions of dollars in losses on the limited portion of funds that he did invest, which he did not disclose to his investors.  Instead of using investors’ funds as he had promised, ALEXANDRE also misdirected at least approximately $14,, to his personal bank account.  For example, ALEXANDRE used $, in investor funds to purchase a BMW car for himself and spent an additional $13, of investor funds on car payments, including to Mercedes Benz.

*                *                *

In addition to his prison term, ALEXANDRE, 51, of Valley Stream, New York, was sentenced to three years of supervised release and ordered to pay forfeiture in the amount of $,, and restitution in the amount of $,, 

Mr. Williams praised the investigative work of the Federal Bureau of Investigation and also thanked the Commodity Futures Trading Commission, which brought a separate civil action.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorneys Nicholas Folly and Jared Lenow are in charge of the prosecution.

New York Criminal Lawyer Describes Fraud Involving Foreign Currency Trading

Each day, the currency market trades around $5 trillion. This is times more than trades made on the New York Stock Exchange. Forex investors can make millions of dollars from relatively minor fluctuations in the value of one currency against another. However, the U.S. Commodity Futures Trading Commission warns that the Forex market is extremely “volatile and carries substantial risks.”

Some players in the Forex market try to mitigate the risk and maximize profit by trying to manipulate the Forex market. Forex fraud can cross the line into illegal behavior and can lead to criminal charges. If you are accused of participation in a Forex scam, you need to be vigilant about protecting your future and defending yourself in the best way possible.

A New York securities fraud defense attorney at Bukh Law Firm, PLLC understands the rules and regulations governing the Forex market and can provide you with advice, guidance, and dedicated advocacy as you fight the charges against you.

What is Forex and Forex Broker Fraud?

Forex broker fraud is one of the most common types of foreign currency trading fraud. Forex brokers may make dishonest promises or use aggressive and unethical marketing tactics to try to entice potential investors to turn over money to the broker. Brokers may try to rack up commissions at the expense of the client by executing unnecessary trades or encouraging high-risk investments, or may arbitrarily move quoted rates in order to trigger stop orders even when the rates of other brokers have not actually gone to that price. These fraud schemes can often result in brokers making big money while individual investors experience significant financial loss.

The question of whether Forex broker fraud occurred or not can sometimes be difficult to answer. For example, a broker’s intention is difficult to determine and it is not always clear that a broker acted for the purpose of increasing commissions or enriching himself at the expense of clients. The complexity of Forex trading can be a benefit to brokers who are accused of engaging in foreign currency trading fraud, because brokers do not have to prove they are innocent of wrongdoing.

Unless a prosecutor can prove beyond a reasonable doubt that the broker violated the law, conviction should not be possible in a system where the burden of proof is on the prosecutor and not the accused.

Arkady Bukh &#; a seasoned New York City criminal lawyer &#; can provide assistance to brokers accused of fraud crimes by helping to plant the seed of doubt in the mind of the jury hearing the case.

While it is sometimes difficult for prosecutors to successfully make a criminal case when Forex broker fraud is suspected, civil claims may also be brought in an effort to impose fines and recover investor funds. The burden of proof is lower in civil cases and while there is no risk of jail time, there is the potential for significant financial damages. Whether you are facing criminal or civil charges for involvement in a Forex fraud scam, it is imperative that you have a lawyer looking out for your interests and fighting for you.

Other Types of Currency Trading Fraud

While Forex broker fraud is common, it is not the only type of foreign currency trading fraud. Forex traders have also been accused of making large purchases or sales moments before daily price fixing occurs in order to artificially push the price up and down. Big banks were able to help companies lock in gains with this technique at the expense of small investors. Market manipulation is a crime, but prosecutors have to prove that the defendant acted intentionally to interfere with customary market pricing.

Like with Forex broker fraud, any type of manipulation of the currency market could be more likely to result in financial consequences rather than jail time. JPMorgan Chase & Co. and Citibank each paid multi-million dollar fines to regulators for rigging key foreign exchange benchmarks in In total, six firms were required to pay $ billion in fines and penaltiesaccording to Bloomberg.

Getting Legal Help with Forex Scam Defenses

Bukh Law Firm, PLLC can provide representation to brokers, banks, traders, and anyone else accused of involvement in a Forex scam. The goal of your defense lawyer will be to raise doubts about whether your actions were in violation of laws regulating the Forex trading market in order to try to avoid financial consequences and criminal penalties. Your securities fraud attorneys can also help to negotiate a plea deal if you don’t want to take a chance on facing criminal charges in court.

At Bukh Law Firm, our attorneys understand the rules and regulations governing the Forex market and we can assist you if you are accused of breaking those rules. We will fight hard to help you avoid being convicted or suffering financial losses.

Give us a call today to learn more about your legal rights and for assistance responding to serious state or federal criminal charges arising out of allegations of fraudulent behavior.