LeapRate's Daily Forex Industry Newsletter
Join now to receive first access to our EXCLUSIVE reports and updates.
Screenshot of a breaking news alert e-mail from Q2 2017
In the latest development in 25 year-old FX fraudster Alex Hope’s two year contretemps with Britain’s financial authorities, the FCA commenced its trial today against the high-profile bogus trader who bilked investors out of £5.6 million
Flamboyant fraudster Alex Hope may be brought to justice shortly, as the two year long legal wranglings which he faces have today taken a further turn as Britain’s Financial Conduct Authority prepares its ruling on an FX fraud in which Mr. Hope duped investors out of approximately £5.6 million.
Mr. Hope’s relatively humble career as a catering manager at Wembley Stadium gave way to a bogus role as a self-styled currency trading expert after he opened a spread betting account in 2009. During this time he blew substantial amounts of investors money at casinos and nightclubs, and, famously a £125,000 bottle of Nebuchadnezzer champagne in Liverpool, England.
According to a report today by Bloomberg, Sarah Clarke, a lawyer representing the Financial Conduct Authority explained at the first day of trial in London today that Alex Hope used investors’ money “as his own personal piggy bank.”
Mr. Clarke was arrested in early 2012 and subsequently charged with fraud in April 2013 at which time he and an accomplice, Raj Von Badlo, were processed and bailed, with their bank accounts containing approximately £3 million having been frozen by British authorities.
In keeping with Mr. Hope’s caddish and extrovert methodology, he had financed the Fast Growth Entrepreneurs Club at Westbury Gallery in Mayfair, one of London’s most upscale neighborhoods.
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 at casinos and £512,000 at clubs and bars, Ms. 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. Mr. Von Badlo’s involvement has led to him also being on the receiving end of the long arm of the law, and is simultaneously charged with making misleading statements to investors while promoting Mr. Hope’s fund.
Mr. Von Badlo told investors he had done due diligence on the fund, had access to Mr. Hope’s bank accounts, and was monitoring Mr. Hope’s trading activity. Mr. Von Badlo and his wife invested about £200,000 of their own money, according to Ms. Clarke’s statement.
“It’s difficult to discern how much Mr. Von Badlo knew about this scheme, even though he was so actively promoting it,” continued Ms. Clarke. “It seems unlikely that they would have invested with Hope “if he and his wife knew what was happening with investors’ money,” she said.
Mr. 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 from the fund following Hope’s arrest.
Aside from the misappropriation of client monies, operating a collective investment scheme without correct regulatory checks and balances is highly illegal in most jurisdictions, and can often carry a jail sentence.
The long, drawn-out case continues, however by British standards the sum involved is relatively high, and the method by which the alleged crime was conducted was willful and high profile, therefore it is likely that it may end in a severe penalty.