The war against Forex scams continues to be waged as the fraudsters find more inventive ways of deceiving their inexperienced victims.  The lawyers in the banking and financial fraud team, headed by Joanna Bailey, have been instrumental in bringing class actions to halt the activities of several scammers and also through negotiation.  Our lawyers continue to be alert to the ever-changing methods that they use.

Joanna Bailey, head of Giambrone & Partners banking and financial fraud team, has identified a potential breach of process and believes that many novice investors are unwittingly caught by this and simply do not realise that they have been led into the situation by the broker.

The markets are complex and trading in such an environment involves significant risk and brokers are not permitted to encourage or facilitate trading in a raft of complex types of trading involving inexperienced investors who have no familiarity or understanding of such trading.  They are obliged to qualify their clients as either novice of professional traders.  Increasingly dubious brokers are revisiting individuals that had previously traded with them and re-engaging with them and inviting them to continue trading in the elevated capacity of a professional trader.   The unwitting individual completes a form with ambiguous questions framed in such a way that the person completing the form does not realise the implications and the fact that they are compromising their position as consumers as opposed to professional traders.  Once the person starts to trade they begin to lose money which they a told is irretrievable and entirely due to their own trading.

Joanna commented "frequently, due to their inexperience, novice investors will accept what the investment broker tells them without question" she further remarked "once they have lost money they are led to believe that the money they "invested" has been lost due to their own decisions, particularly in the face of the aggressive attitude often displayed by the broker when robustly rebuffing any suggestion that fault lies anywhere other than the unfortunate victim.  Such brokers rely on the investors' lack of knowledge as to how the markets work and the requirements that the regulating authorities compel legitimate brokers to adhere to"

Joanna Bailey and her team successfully managed to recover £75,000.00 for a client who had traded with a broker and had decided to stop trading.  After a period of approximately one year she was contacted again by the broker who suggested that she may like to complete a form to assess her trading status.  She had no professional understanding of the markets and innocently completed form which had imprecise vague questions, one of which asked if she had experience of trading, which she guilelessly indicated that she had, due to her previous brief flirtation with trading the previous year, which does not begin to compare with a seasoned investment broker with a thorough understanding of the market fluctuations and the trading vehicles available.  The broker persuaded her that she now qualified as a professional trader, a status bringing certain advantages. 

After considerable losses she was brought to financial ruin, her relationship broke down as a result of the significant loss of money.  Her appeals to the broker were met with an aggressive insistence that it was entirely her own fault coupled with highly disparaging personal remarks about her.   Her physical and mental health collapsed and she was brought to the brink of desperate measures.

Joanna Bailey and her team recognised that she should never have been classified as a professional trader based on such slender spurious evidence and fought the broker, a well-known name, to recover the bulk of the money our client had lost. 

Joanna pointed out "all too often when novice investors appeal to the broker after significant losses and they are told that their losses are their own fault and that there is nothing that can be done to recover the lost money. An inexperienced investor has no way of knowing that they should not have been permitted to trade in the first place. " Joanna went on "many people who have been duped in this way are unaware that there may a route to recovering their money."

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