Exclusive: IronFX client group files three petitions with the European Parliament, Markos Kashiouris faces criminal lawsuit - FinanceFeeds

Exclusive: IronFX client group files three petitions with the European Parliament, Markos Kashiouris faces criminal lawsuit

Three petitions have been sent to the European Parliament against IronFX, two from Hungary and one from Italy, and the European Parliament has responded with a letter to all members with a status and proposed action in investigation. Congruently, CEO Markos Kashiouris and two German account managers are now the subject of a criminal investigation by the Munich prosecutor

Controversial retail FX company IronFX has been the center of high profile media attention for quite some time, beginning very shortly after its rapid expansion from its origins in Cyprus to several regions globally.

Four years ago, the company became the center of outrage in mainland China, where its Shanghai office began to gain a reputation for non-payment of introducing brokers and direct retail clients, amounting to a substantial sum, and at the beginning of 2015, Chinese traders stormed the offices in Shanghai and staged a protest which was broadcast across Chinese media.

The company exited from Shanghai, however its woes continued and its woeful behavior was continually tolerated by Cyprus’ regulatory authority CySec, and media reports on home territory in mainstream newspapers massively distorted the realities of the firm’s operations, demonstrating corruption.

IronFX currently owes $176 million in unpaid client withdrawals, has a tax liability to the Cyprus government of over $1.5 million; two of its principals have been in front of a Magistrate’s court in Shanghai for their part in operating what China considers to be a fraudulent entity,

and has been engaged in litigation between IBs and traders from all over the world.

IronFX’s dishonorable exit from China in which said clients and IBs made a media campaign and the offices of the firm were stormed has now faded to long term memory, yet the money is still outstanding to retail clients and IBs.

Two IronFX senior principals were recently tried by the Chinese government in a court in Shanghai, something that very rarely happens to overseas firms.

Additionally, senior European Commission politicians have actively spoken out in European Parliament, labeling IronFX as ‘fraudulent’.

IronFX has managed to effect influence over the media, local Cyprus newspapers having reported incorrect accounts of legal proceedings in order to whitewash the realities (FinanceFeeds has the court papers on file) of said cases.

Yet despite all of these clear transgressions, IronFX continues its operations, and continues to blast retail FX traders and IBs with aggressive marketing material, itself counter to MiFID rulings on deposits and overly persuasive methodology.

The company is the subject of disdain by European Parliament ministers, and has been on the agenda of Cyprus’ opposition party AKEL leader Andros Kyprianou for several months, his having penned several letters denouncing the firm’s commercial behavior.

Yet the company continues to exist and to onboard clients.

Today, FinanceFeeds has obtained several documents from various courts in various jurisdictions that have been submitted to the European Commission by three petitioning groups.

One of the petitions was filed by a Hungarian entity, and has fifty supporters, the petition stating that the individual concerned “Has not been able to access the funds on his account for more than six months and doubts whether this will ever be possible.”

It continues

“He further estimates that the amounts withheld by the company are in the hundreds of millions. After describing the fraud method allegedly used by the company, he accuses CySec of failing to provide adequate investor protection, as it has not suspended hte license of the company or invoked the Law of Insolvency. He now calls on the implementation of EU rules and the European Parliament intervention in this matter.”

With fifty signatures and Member of European Parliament and representative for European Parliament Committee on Economic and Monetary Affairs Tibor Szanyi having stood up in front of the European Commission and stated “Mr President, for many people in Europe and all over the world, the company name IronFX became a synonym for fraud” in October last year, this has a fair chance of being heard.

Indeed, Cyprus is one of the regions within the EU which ESMA, the European Securities and Markets Authority considers to be non-compliant, and having asked CySec several times why IronFX is continuing business unhindered and receiving a metaphorical shoulder shrug whilst every compliance officer and senior director of every brokerage in Cyprus was called to a meeting recently to receive a stern diatribe from Chairman Demetra Kalogerou, nothing has been conclusive.

The second petition emanates from Italy, and is along exactly the same lines, with the same purpose and wording, and the third one from Hungary, stating “The petitioner used IronFX as a ForEx broker. The company is regulated by the Cypriot Securities and Exchange Commission (CySEC). It appears that, a certain point in time, IronFX stopped processing requests for withdrawal of client funds, giving various excuses for this. The petitioner accordingly referred the matter to the Financial Ombudsman in December 2015, only to discover that it takes between six and nine months to process such complaints.”

In addition to these petitions, FinanceFeeds has a letter dated March 31, 2017 from the European Parliament, addressed to all members, in Italian, responding to the petitions and providing full detail as to the sequence of events and the action that should be taken.

FinanceFeeds is also in receipt of a letter from the Munich Prosecutor in Germany. In this letter, sent to a client in Germany that suffered substantial damages, it is stated that a criminal investigation against IronFX owner and CEO Markos Kashouris and two German account managers has been instigated in Germany.

FinanceFeeds will continue to conduct research and to report on the outcome of these trials and petitions.

 

 

 

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