Exclusive: The Murky Unfoldings Behind CommexFX's €100,000 Fine

The €100,000 fine imposed on CommexFX and its owner by the Cyprus Securities and Exchanges Commission (CySEC CySEC The Cyprus Securities and Exchange Commission (CySEC) is a financial regulatory authority of Cyprus. CySEC is one of the key watchdog authorities for brokerages in Europe, whose financial regulations and operations comply with the European MiFID financial harmonization law.Founded in 2001, CySEC is instrumental in providing licensing and registration for forex brokers and previously binary options providers.CySEC is responsible for a variety of different functions, which includes the supervision The Cyprus Securities and Exchange Commission (CySEC) is a financial regulatory authority of Cyprus. CySEC is one of the key watchdog authorities for brokerages in Europe, whose financial regulations and operations comply with the European MiFID financial harmonization law.Founded in 2001, CySEC is instrumental in providing licensing and registration for forex brokers and previously binary options providers.CySEC is responsible for a variety of different functions, which includes the supervision Read this Term) has stirred up some controversy across the industry. Clients claim that they haven’t received their withdrawals, and CySEC, not being able to take any additional action, decided to unveil a fine it imposed on the broker and the company’s owner a couple of years ago.

There is no reasonable explanation for CySEC's withholding of this information for two years other than that the regulator is aiming to communicate to the investment community that some action was indeed taken against CommexFX.

Egyptian report says Alimari is detained by the local authorities

Finance Magnates has delved deeper into the unfolding of the troubled brokerage, culminating in the warning against it for endangering client's interests.

After receiving the license suspension notice in mid-June, CommexFX was given a two weeks term by CySEC to repay pending withdrawal requests to its clients. When that term expired, the company was given an extension of two more weeks to handle the issue.

Former employees claim that CommexFX has not, and has never actually held any client funds. According to them, the reason for clients not being repaid has to do with the firm being “poisoned by operational issues." However, they did not elaborate on the nature of these issues.

Alarming Ties

CommeFX's website was registered in October 2011, and was launched shortly after in January 2012. According to a source close to the matter, in March 2015 the company had close to 40 employees and about 6,000 clients. Ever since, the brokerage's clients have experienced substantial difficulties in withdrawing their funds, while the owner, Abdalrahman Alimari, was reported by Egyptian news portal youm7 to have been detained by Egyptian authorities pending another matter.

People close to Alimari say these reports are false, and that he is exploring the possibility of taking legal action against the Egyptian media for slander. They added that Mr Alimari is currently doing everything in his power to retrieve client funds and disburse them to the customers of CommexFX.

Interestingly, Mr. Alimary is also tied to another ailing broker, Merex Markets. Catering mainly to Arab and Chinese clients, Merex Markets offers Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term and precious metals trading and holds offices in Tbilisi and Cairo. Mr. Alimari’s social media profiles underscore his double affinity: His LinkedIn profile indicates that he is the CEO of CommexFX, while the Merex Markets official investors group on Facebook list his social media profile as an administrator.

False Promises

Merex Markets' website states that the company provides managed account services and claims to be using a “faultless system” that returns from 7 to 12 percent per month. The page portraying this information has since been removed from the current version of the firm's website.

Instead, another message has been put up stating, “Did you know an investment with Merex Markets would have yielded an extraordinary return of over 114% in 2012? Some may say that this is nothing but luck. However to repeat the feat with a return over 96% in 2013 is an incredible performance that would turned most hedge fund managers green with envy. Especially when we tell you that over a 24 month period the fund managers at Merex Markets did not have one signal losing month.”

The above message sounds suspicious, not only because of the spelling mistakes, but also because the company claims to be on par with major investment banks, where few trading desks have indeed enjoyed periods of no monthly losses for a number of quarters.

"Administrative Errors" Lead to Liquidation

With Merex Markets asking for a $10,000 minimum investment from its prospective clients, the story doesn’t end well. According to an official message published on the board of the company’s Facebook group, the firm has been struggling financially.

The message continues with a statement that work is being done to find alternative solutions for the ongoing crisis, however the firm denies all rumors about fraudulent activity and the loss of investments with Merex Markets.

A statement about proper liquidation of the firm, a timetable for refunding client deposits and an appropriate methodology when compensating clients follows, with clients being promised to be refunded all amounts due to them - including their investment and profits.

The statement reads further, “The firm is calling on its customers to stand side by side with the company through the next phase until the completion of the review of all dues to the clients of the company.”

“We extend our apology for all the administrative errors that occurred on our part throughout our attempts to get out of the crisis and stress that the company has attempted to recover in various ways and tried hard not to reach this stage,” the message concludes.