Investment Fraud Lawyer Blog

Bank of New York Mellon has been sued in separate civil lawsuits filed by the U.S. Department of Justice and the Attorney General of New York seeking damages in excess of $2 billion related to BNY’s alleged practice of fraudulently misleading and overcharging public pension funds, universities, and other clients for foreign exchange (FX) currency transactions. In essence, the complaints allege that BNY Mellon profited by giving its foreign exchange clients the worst exchange rates of the day, and even created fake trades.

Continue reading "Forex Fraud Case Reveals the Value of Whistleblowers" »

SEC Commissioner Luis Aguilar called for the SEC’s Office of Investor Education and Advocacy to issue an investor alert warning retail investors about the risks of trading off-exchange foreign currency contracts. This comes in the wake of the SEC’s recent approval of a temporary rule allowing the sale of retail forex contracts to unsophisticated investors until the SEC decides whether or not to issue more comprehensive rules. (“SEC Official Seeks Investor Alert on Retail Forex,” Reuters, CNBC.com).

Continue reading "Investor Alert - Forex Trading Can Be Lethal" »

A lot of retail investors are getting involved with Forex trading, according to Stephen L. Bernard’s Wall Street Journal article entitled “Is Currency Trading Worth the Risk?” It is only worth the risk if you can afford to lose every penny you put into it, and quickly. Regulators are seeking to warn retail investors of the risks, but retail forex trading is increasing.

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Massachusetts may join California, Virginia and Florida in suing Bank of New York Mellon Corp. for allegedly overcharging the state's pensioners for foreign exchange trades, according to Carrick Mollenkamp’s Wall Street Journal article entitled “New Front Opens in Massachusetts for Forex Dispute.” Federal agencies are reportedly investigating.

Continue reading "Massachusetts Claims it was Overcharged for Forex Trades" »

Bank of New York Mellon Corp. admits it did not act in its clients’ best interest in pricing foreign currency trades but says its clients are to blame because they knew or should have known what was going on, according to a Wall Street Journal article by Carrick Mollencamp and Tom McGinty entitled “Inside a Battle Over Forex.”

Continue reading "The Forex Mess Gets Nasty" »

The Massachusetts securities division filed two Administrative Complaints against unregistered broker-dealers that allegedly perpetrated foreign-exchange investment scams, according to Liz Moyer’s recent Wall Street Journal article, “Massachusetts Charges Two Firms in Forex Schemes.”

The cases are: (1) In the Matter of Eagle Trades, Ltd., Eagle Trades Ltd., LLC, and Terrance William Osberger, Docket E-2010-0005, and (2) In the Matter of Osiris FX, Evan Andersen, Glenn Anthony Manterfield, Alberto Sciola Jr., and FX Capital Services, Docket E-2010-0077.

Continue reading "Another Cautionary Tale of Investors Seeking Higher Yields Falling Prey to Fraudsters?" »

The Wall Street Journal is reporting that the Arkansas Teacher Retirement System has filed a putative class action lawsuit against State Street Corp. alleging that the bank overcharged the it and other similarly situated customers in foreign exchange (Forex) currency transactions. See article by Jeanette Neumann, “State Street Is Sued by Arkansas Fund.” The suit was filed on February 10, 2011 in the U.S. District Court for the District of Massachusetts.

Continue reading "Forex Fraud Claims Just Keep Coming" »

Banks overcharged major investment firms for currency trades, according to a Wall Street Journal article by Gregory Zuckerman, Carrick Mollenkamp and Lingling Wei, titled “Suspicion of Forex Gouging Spreads. The article cites bank insiders and the apparent broadening scope of alleged abuses in the $4 trillion foreign-exchange market.

Continue reading ""Gouging" Issues Permeate Forex Trades" »

Prosecutors have taken over whistleblower lawsuits against Bank of New York Mellon and State Street Corp. that accuse the banks of fraud in overcharging public pension funds by tens of millions of dollars for foreign-exchange transactions, according to a Reuters article edited by Lincoln Feast, entitled “Prosecutors widen currency probes: report.”

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The U.S. Commodity Futures Trading Commission (CFTC) filed suit last week against 14 foreign currency exchange (Forex) dealers, according to a Jan. 26, 2011 CNNMoney article by Charles Riley, “Regulator sues foreign currency dealers.” The suit charges that the firms unlawfully solicited members of the public to engage in foreign currency transactions, operated without being registered with the CFTC, and engaged in illegal currency trading. The CFTC seeks civil monetary penalties, as well as trading and registration bans, according to the article.

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The world of foreign currency exchange trading or forex is rife with fraud. We are talking about stealing customers’ funds, as well as misrepresentations and omissions to disclose the true risks of forex trading even when the investors’ money is actually invested. Consider the following.

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It may seem like something out of a movie where thieves or opportunists try to make money by taking advantage of fractions of a penny differences in trading, but unfortunately the National Futures Association, a self-regulatory organization policing the futures market, is beginning to analyze trades executed by its 16 member forex (foreign exchange) firms to see whether firms are taking unfair advantage of such differences which the industry refers to as “slippage.”

Continue reading "Forex Trading Under Investigation" »

The U.S. Commodity Futures Trading Commission (CFTC) recently announced that a federal court in Texas had entered a final judgment order imposing monetary sanctions against Premium Income Corp. (PIC), and its affiliates, Inforex, Ltd., and Tri-Forex International, Ltd. totaling more than $123 million.

Continue reading "Investors Scammed by Forex Traders" »