Following up on Finance Magnates reports last week that the offices of TeleTrade have been raided by local law enforcement authorities, this morning Russian authorities have confirmed that a major forex brokerage is facing fraud charges.
According to information agency RIA Novosti, the company in question is the Bank of Russia licensed TeleTrade. The move by the local law enforcement happens only a month after the company was granted a regulatory license for operation as a forex brokerage by the Bank of Russia.
The operation was coordinated between the Ministry of Internal Affairs and Federal Safety Service. The authorities have announced that they filed a legal case against a “major forex dealer” for fraud involving large sums of money with the alleged damages to thousands of clients in the millions of rubles.
“Russian authorities have conducted a coordinated operation aiming to document the actions of the executives of a forex dealer company that is part of an international group of companies,” the spokesperson of the Ministry of Internal Affairs Irina Volk said in an official statement.
The charges allege that the company’s executives have been accepting deposits from clients related to trading on financial markets and consulting services. The control over the deposits which have been solicited from clients was then transferred away from clients.
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Criminal charges have been brought in several regions across Russia with the company boasting on its website to have at least 9 offices in the country.
Authorities state that they have confiscated a large number of computer files, documents and alleged proof that the systems of the brokerage have been tampered with to the disadvantage of the clients.
The news completely shatters the reputation of the Bank of Russia’s capabilities to regulate the forex market, since TeleTrade was one of the first companies to receive a forex dealer license.
A number of forums in Eastern European countries are full of posts that are claiming that the company has been using fraudulent methods to manipulate prices and ultimately cheat its clients. There have been no official investigations by the company’s European regulator, the Cyprus Securities and Exchange Commission (CySEC).
Numerous clients which have visited the educational seminars of the firm in different countries have shared with Finance Magnates reporters that the trading methods taught in the courses, including bracketing news events with entry orders, have netted them substantial losses.