Liquidators say Forex CT customers lost $77.5 million but got none

abdelaziz Fathi

Liquidators for now-defunct retail broker Forex Capital Trading (Forex CT) said at least 11,174 former customers have incurred losses totaling $77.5 million or more.

Forex CT

Forex Capital Trading, a fraudulent forex platform likened to a Wolf of Wall Street set-up based in Melbourne, was shut down in 2020. The Federal Court in Australia ordered the firm to pay $20 million for engaging in “systemic unconscionable conduct”. The sole director of the company, Shlomo Yoshai, was also hit with a $400,000 penalty and disqualified from managing corporations for ten years.

Despite these hefty fines, Forex CT’s customers didn’t receive a penny from this action and liquidators estimates the losses they incurred were at least $77.5m (but likely more). And, it remains unclear whether the company or Yoshai have the capacity to pay the penalties imposed.

The investigation report released by the joint liquidators of Forex Capital Trading found that it targeted unsophisticated investors with aggressive sales tactics. Only about 10.5% of customers identified made any profit using Forex CT.

The administrators further explains that Forex CT’s marketing campaigns targeting Australian clients were undertaken from countries with little, or no regulatory oversight. Per the report, this allowed Forex CT to use high-pressure sales tactics that were not in the best interests of its clients without recourse.

EXAMPLE OF CONDUCT BY FOREX CT REPRESENTATIVES

Call between Forex CT Representative and Former Customer

Representative: “Did you hear that in the background, the gong and the clap, someone hit 100,000 profit already today.  So when a client makes 10,000, you’ll hear that gong sound at the background.”

[The gong was rung when a Representative had a Former Customer deposit $10k or more into their account, not when a Former Customer profited].

FTI Senior Managing Director Daniel Woodhouse said: “Forex CT targeted unsophisticated investors and its marketing campaigns targeting Australian clients were deliberately undertaken from countries with little, or no regulatory oversight, which allowed Forex to say what it wanted without recourse. I strongly urge former Forex customers to register for a potential claim against the Company, in order to allow the Liquidators to request those claims be paid by Forex CT’s parent – Invesus Group Ltd in Gibraltar.”

Liquidators also revealed that Forex CT made misleading or deceptive representations to clients and recommended inappropriate trading strategies to them. The firm encouraged maximising trading volume and client deposits instead of compliance with regulatory requirements. In this context, employees were rewarded for net deposits by clients, that is gross deposits less withdrawals.

FOREX CT REPRESENTATIVES’ INTERNAL MESSAGES 

The following are a selection of messages by Forex CT Representatives from the company’s internal customer relationship management (CRM) database between 2017 and 2019, which were uncovered during FTI Consulting’s investigation.

  • “homeless bankrupt – absolutely nothing can be done remove.”
  • “Checked in. Rambled on about some health stuff. Not getting in until new financial year.”
  • “had a close friend die and is grieving she says. wanted to WD, saved it. but she wont be trading for a few weeks.”
  • “REMOVE FROM SYSTEM, LOST TOO MUCH, BANKRUPT.”
  • “Very upset with [Representative] – lost his house over not being able to access his capital.”
  • “Called back and I hit him up for another (sic) 500 to get a DC. Not working atm and all his cards are maxed out.”
  • “Touched base with client regarding portfolio. Cancelled her 34k withdrawal but she would need ot (sic) take something out due to her father passing away and needs to pay for it.”

 

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