Forex Fraud - The Continuing Fight against Sham Brokers

Financial fraud is a worldwide issue and it will come as no surprise that fraudsters take extreme measures to cover their tracks and hide the money they have taken from unsuspecting investors.  A number of the frauds are simply old scams re-envisaged, a High Yield Investment fund in some cases is simply a Ponzi scheme.  It is based on the same principle as Charles Ponzi’s scheme of robbing Peter to pay Paul that he set up in 1920.

Stealing a legitimate company’s identity is far from a new idea, so-called “clone” companies often copy the website of a legitimate broker, use the same firm registration number (FRN) as the genuinely registered broker but use their own phone number and address and website details.  Anyone who notices is told that the details on the Registry are out of date. Simple.

 It often takes a considerable amount of time to trace the stolen funds through the twists and turns the fraudsters have taken to hide their whereabouts and the whereabouts of their ill-gotten gains.  Sham brokers plan their deception extremely carefully and almost always the base for their activities is set up in parts of the world with weak financial regulation, or even in parts of the world that are judged to be unsafe.  All these steps are designed to make it as difficult as possible for their victims to recover money taken illegally.

Jurisdiction can present a problem and the criminal brokers do not intend to answer for their fraudulent activities and there are “friendly” regimes across the globe that have no problem sheltering such individuals.  Another problem is the cost of tracking the convoluted company structures which are filled with shell-companies leading all over the world.  Weak Regulators together with banks who are unable to act to identify the true recipient of funds without a court order and the slow progress due to the time it takes to piece together evidence and find the perpetrators, which can take over two years, frequently results in victims running out of money and the appetite to continue the pursuit.  The defrauded victims are unwilling to fund further investigative enquiries aimed at building evidence for the courts or regulators, having been parted so callously from their money in the first place.

Despite all the barriers, the lawyers at Giambrone have been able to reach settlements for a number of our clients, frequently amounting to thousands of pounds.  Also the firm campaigns against “lip-service” regulators and weak regimes that turn a blind eye to the activities of fraudulent brokers; for example, Giambrone was involved in the successful press campaign in Israel which eventually forced the Israeli government to outlaw the many brokerages that were working out of Israel with the sole intention of defrauding innocent investors.

If you have been scammed by a fraudulent broker or would like to know more about how to recover your lost funds please email or telephone 020 7183 9482 for further information.