Giambrone instructed in a Two Million HKD Investment Fraud

The scourge of fraud involving trading on the Forex market is not necessarily limited to novice investors, although inexperienced investors are generally the fraudster’s target market. Giambrone has been instructed by an experienced investor who suspected the well-known broker she was dealing through, of irregular fraudulent behaviour.

The client invested 170 thousand Hong Kong dollars (HKD) and had successfully traded extremely well up to the impressive sum of two million HKD. Our client was not a novice investor and when the broker closed her account and accused her of hedging, arbitrage and market abuse, she was well aware that this was not the case and she suspected that she was a victim of deliberate fraud. The broker refused to return our client’s traded profits returning only her initial 170 thousand HKD.

Joanna Bailey, an associate who heads the financial fraud team, said “our client was experienced enough to recognise that the broker had acted improperly, which was fortunate as other investors may not have been able to see that the actions of the broker were irregular.” Joanna further commented, “a less experienced investor may not have felt so confident and would not have considered that they could take any action against the broker.”

Joanna Bailey commissioned an independent forensic expert, on behalf of our client, to investigate and establish whether the broker had just cause to close our client’s account. The independent expert examined the three allegations made against our client, those of hedging, arbitrage and market abuse. 

The whole situation was thoroughly examined the report concluded that there was no evidence of hedging, which is a common means of minimising risks in a volatile market; nor was there any evidence of arbitrage, which relates to the purchase and sale of an asset in order to profit from the difference of the asset’s price between markets. With regard to the wide term of market abuse, that relates to a raft of actions, such as insider dealing etc. No evidence of any such activity was found, in fact, there was no evidence of anything connected to any of the allegations made by the broker and therefore no grounds were found for voiding the profits built up in our client’s account.

The report has been served on the broker together with a request to return the retained profits, amounting to two million HKD, to our client’s account, failing which proceedings will be issued against the broker.

Joanna Bailey stated “banking and financial fraud is rapidly becoming a leading cause of crime and the Financial Conduct Authority (FCA) commissioned a research study into understanding the nature of the victims of investment fraud. Unusually, our client was an astute investor with an understanding of the markets who could immediately recognise the broker’s claims were invalid.  The majority of victims are not experienced and are actively groomed by the fraudsters purporting to be legitimate brokers using the veneer of professionalism, such as high-quality documentation, a professional business set-up and well-presented salespeople to deceive.”

Giambrone’s financial fraud team has considerable success in recovering money lost in investment fraud and have developed a range of strategies to combat this growing menace and frequently achieve the return of our clients’ money through a dogged pursuit of the perpetrators through various avenues.

For more information about recovering monies lost in investment fraud please click here.