UK authorities seem to be much more vigilant than those in most jurisdictions regarding retail FX firms which can not fulfill their commitments to clients. City of London Police are now investigating another retail broker for alleged fraud.
The bankrupt broker, FX World Managed Account Ltd (FXWMA), is allegedly the latest firm that got caught in the spotlight of the City of London Police. Investigators have visited the company’s offices in recent weeks, according to the Wall Street Journal. A spokesman confirmed today that “a foreign-exchange company” is being investigated in relation to fraud but that no arrests have been made so far.
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On its website it says that FX World Managed Account Ltd is registered in England and Wales and is an appointed representative of Forexmax Ltd which is authorised and regulated by Financial Conduct Authority (FCA). Other than that, FXWMA clients were only aware of a notice that the company had dissolved and went into liquidation. In contrast, Forexmax website’s is working with no mention of any legal issues. According to the FCA, FX World’s license was suspended on June 29.
In an interesting twist to the story, the of head of trading at FXWMA, while the firm was still operating, was Gary Andrews. A London-based FX trader of the same name was suspended from Rabobank in late 2014 over his role in the currency rates manipulation scandal that shocked the big banks handling the institutional FX trading industry. His Linkedin profile hints that he is indeed the same person.
The authorities offered no explanation for the reasons for the fraud investigation, but when a broker collapses it sometimes leads clients to being unable to withdraw all their funds and therefore they file complaints. As FXWMA was a UK company, presumably clients are at least partially covered in this case under the country’s financial compensation scheme.
In March, the City of London Police raided the offices of CWM’s (Capital World Markets) and arrested a number of employees on suspicion of fraud for false representation, conspiracy to defraud and money laundering.