Suicide, fraud, arrests, Chinese investors and Forex: the sad story of EuroFX


Reuters has published an investigative article entitled London Calling: How British firms built a pyramid scheme in China that lost millions, which describes a network of opaque companies which drew on London’s reputation as a leading financial center, and the illusion of regulation, to dupe Chinese investors.

The story has all the elements of a great (but sad) saga. Fraud. Deception. Denials. And Suicide.

David Andrew Byrne
David Andrew Byrne

Reuters follows the path of David Byrne and a company he represented called Euro Forex Investment Ltd, known as EuroFX. Byrne is a British businessman who sells investment products. (Byrne is currently listed on LinkedIn as the Chelmsford, UK based founder of a company called The Intermarket Group, also known as Intermarket Analysis.)

According to Reuters, Byrne was running around China and other locations on behalf of EuroFX promised outsized returns on foreign exchange investment schemes. Chinese authorities now say that EuroFX was a Ponzi scheme, using cash from new investors to pay previous ones until the well ran dry. Chinese police estimate losses of at least $70 million from the well-run scheme, and they have issued more than 20 arrest warrants for those who helped raise money for EuroFX in China.

However other investors believe that the grand total of defrauded investors may to $1 billion, making EuroFX one of the largest ever Forex industry schemes unveiled to date.

The sad part of the story emerges from one of the alleged victims, Zhang Fusheng, who not only put millions of dollars of his own money into EuroFX but also brought along family memners including his sister Zhang Guiling. Guiling was a 59-year old grandmother in a village in northern China. She apparently borrowed to invest in EuroFX. EuroFX blocked her account in 2013 and the money disappeared. Lenders came after her.

Last August she committed suicide.

And her brother feels sure that the EuroFX mess is responsible.

Even after EuroFX stopped paying out money to clients in mid 2013, Byrnes was out on the road telling clients that they shouldn’t worry about the ‘temporary’ withdrawal problem, but should put more money into the company’s investment schemes – in Byrne’s words, he encourages clients to top up their hedging accounts. The following video shows Byrnes in August 2013 in a pitch he made to an audience in Thailand.

Byrne was apparently eventually detained and questioned by Chinese police, and has been freed on bail but is barred from leaving China. Reuters claimed that he told them in May that he was not actually in charge of EuroFX, despite presenting himself as the company’s CEO. He said another Briton had “full authority” over him.

Unlike many other Forex fraud schemes, EuroFX actually had offices for a while in London. And prestigious offices at that, in London’s Heron Tower, the tallest building in the UK. They would wine and dine out of town guests, mainly from the Far East, giving the aura of a UK-based regulated company. However since EuroFX was not actually licensed by the FCA and all its business came from outside the UK, the local regulator didn’t do anything to stop the fraud. And Chinese investors were left with the impression that they were doing business with a properly licensed and regulated UK investment company – something Byrne would sell, as in the video above.

The full investigative article on the EuroFX fraud call be seen on the Reuters website here.

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Suicide, fraud, arrests, Chinese investors and Forex: the sad story of EuroFX

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