Financial regulators are warning expats about the risks of taking part in foreign currency exchange trading.
The alert follows the conviction of an unlicensed forex trader at Southwark Crown Court, London.
Alex Hope was convicted on a fraud charge after pleading not guilty. He also admitted running an unauthorised collective investment (UCITS).
The Financial Conduct Authority (FCA) prosecuted the case, telling the court that Hope and some associates ran a £5 million scam claiming investors would make high returns that were never achieved.
Georgina Philippou, acting director of enforcement and market oversight at the FCA, said: “Smooth talking Hope was a fraudster who lied to investors solely to part them from their money.
“He promised massive returns but investors only made significant losses and person who gained the most was Hope himself.
“Investors should remember unauthorised investment schemes carry huge risks and if the promised investment returns seem too good to be true they most probably are.”
Hope told investors that he could make a return of up to 100% in just a few months.
In reality, Hope lost over £500,000 of the £650,000 held in his trading accounts and pocketed up to £2 million of investor cash.
Hope’s co-defendant, Raj Von Badlo, also known as Raj Shastri pleaded guilty to recklessly making false representations to investors and of promoting a collective investment scheme without authorisation.
Hope and Von Badlo face sentencing later this month.
Warnings about bogus advisers
Here are the latest bogus financial advisers listed on the Financial Conduct Authority (FCA) web site:
- Shimbashi & Partners
- Wakamy Libman and Associates
- Select Capital Ventures SA
- KwikCash Loans (clone web site)
- Harrison Stones Limited
- Wheeler Consultancy Ltd
- Benson BPO LLC
Dealing with an unregulated firm
If you buy shares, save money or invest with an unregulated firm, you lose any protection offered by the Financial Ombudsman and the Financial Services Compensation Scheme. Broadly, you have no independent place to complain if the deal goes wrong and are unlikely to win any compensation.
Checking if a firm is regulated
Go to the Financial Services Register to check if a firm is regulated in the UK.
Reporting a suspected bogus adviser