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Fake FX Trader Spent Client Cash at Casinos, Clubs
Started:April 23rd, 2014 (07:44 PM) by kbit Views / Replies:133 / 0
Last Reply:April 23rd, 2014 (07:44 PM) Attachments:0

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Fake FX Trader Spent Client Cash at Casinos, Clubs

Old April 23rd, 2014, 07:44 PM   #1 (permalink)
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Fake FX Trader Spent Client Cash at Casinos, Clubs

A 25-year-old man from London cheated investors out of 5.6 million pounds ($9.4 million) in a fraudulent currency-trading scheme, spending the money at casinos and nightclubs, the U.K. markets regulator said.

Alex Hope used investors’ money “as his own personal piggy bank,” Sarah Clarke, a lawyer for the Financial Conduct Authority, said at the first day of trial in London today. Hope, formerly a part-time catering assistant, is charged with fraud.

In a 13-month period leading up to his arrest in early 2012, Hope spent about 2 million pounds of investors’ money, including 950,000 pounds at casinos and 512,000 pounds at clubs and bars, Clarke said. While he did trade some money, most of it resulted in losses, she said.

“The investors had no idea that was what was happening to their money,” she told the jury. “They believed he was holding and trading their money in their interest and for their benefit.”

Hope pleaded guilty to running a collective investment scheme without the regulator’s permission. A second man, 56-year-old Raj Von Badlo, is also on trial, charged with making misleading statements to investors while promoting Hope’s fund.
Criminal Property

Von Badlo told investors he had done due diligence on the fund, had access to Hope’s bank accounts, and was monitoring Hope’s trading activity. Von Badlo and his wife invested about 200,000 pounds of their own money, Clarke said.

“It’s difficult to discern how much Mr. Von Badlo knew about this scheme, even though he was so actively promoting it,” Clarke said. “It seems unlikely that” they would have invested with Hope “if he and his wife knew what was happening with investors’ money,” she said.

Von Badlo, who helped raise about 4.2 million pounds for the fund in exchange for commission, is also charged with transferring criminal property after withdrawing 95,000 pounds from the fund following Hope’s arrest.

Hope, who worked part-time for a hospitality company helping with food deliveries at sports stadiums, began trading when he opened a personal spread-betting account in 2009, Clarke said.

“His first forays were unsuccessful, he suffered large losses,” Clarke said. “Losses were a consistent theme of Mr. Hope’s trading.”

Lawyers for Hope and Von Badlo will argue their case later in the trial. Von Badlo has pleaded not guilty to four charges against him.

Fake FX Trader Spent Client Cash at Casinos, Clubs, FCA Says - Bloomberg

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