Earlier today, the Union Standard Group Forex (USGFX) employees who were being held hostage in Shanghai were released. The three individuals were taken hostage during a raid on the company’s offices by angry traders last week.
The Australian-headquartered forex brokerage’s Shanghai offices were invaded by about 50 clients last Wednesday. The angry investors were came to protest against the losses from trading forex with the broker. 20 staff members were initially captured, although 17 were released earlier.
The 3 remaining hostages were released yesterday, July 24, after several negotiation attempts.
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A USGFX spokesman added that one of the members was a vice general manager. In a statement sent to Finance Magnates, the firm said: “USGFX is also continuing to work with the local authorities to assist them in any way necessary. The safety and well-being of the staff caught up in this situation was the number 1 priority of USGFX and it is a great relief now that they are free.”
USGFX further stated that the investors had used a third-party agent in order to trade forex on the company’s platform: “Apparently the traders in question were heavily shorting the AUD/USD above 0.7600 and continued adding multiple short positions until their accounts were exhausted. It has come to light that an introducing broker was trading on behalf of their clients on the USGFX MT4 platform when the losses occurred and he has conveniently shifted the blame to the company for the outcome – for the trading that he did himself and the company had no part in.”
Company statement notwithstanding, the clients blame USGFX for their hefty losses and it is from that firm that they want compensation.
Chinese Investors Punishing Firms for Losses
According to Reuters, this situation is merely the latest sign of the rising tension in the Chinese financial system, as a large number of investors feel that they have been fooled upon suffering losses through high risk trades. This is not the first time that angry Chinese investors have decided to take the law into their own hands, and it may not be the last. In 2015, a Chinese investor stabbed the chief executive of a struggling asset management in Beijing for losing a trade.