Market Watch
FX
two accounts, amounting to less than $1,000 total. Ward used the rest of the money to pay himself a $180,000 annual salary, support his trading school business, stay at 5-star hotels at
his “trading
Since Forex data is available on a survey & voluntary basis, data is difficult to analyze. Retail Forex is even harder to quantify
The problem with this when analyzing data is that it is difficult to determine how many unique platforms or strategies there are in existence, compared to how many are simply a white label of another.
FOREX ATTRACTS
CRIMINALS Since Forex was unregulated, the Forex market attracted a white collar criminal element that used Forex as a story to steal money from people. Unlike the rather sophisticated Madoff operation, many of these criminals simply take money from customers and spend it on lavish lifestyles, sometimes not even trading 1 contract. Another factor is that Forex is unknown to many, and rather complex for someone
who doesn’t have a mathematical or financial background. Thus when the criminals explain how big banks trade currencies and make billions, to the average person it sounds exciting.
A good example is provided by the case of Joel N. Ward, currently serving a prison sentence for his crimes which he was convictedvi
.
Over his trading career, 110 people trusted Ward with $15 million of their money, with over $1 million was taken in the final weeks of the scheme. Ward and his employees traded only $2 million of this money, losing $1.84 million. Twenty-two of the 24 accounts traded incurred losses, with the profits in the other
retreats,” and pay out $3.7 million in “lulling payments” to investors who demanded money from their supposedly profitable trades. He also created fictitious Merrill Lynch account statements to show that one investor had an account balance of $9.5 million. In August 2006, Washington Mutual Bank contacted the authorities with suspicions about Ward’s banking activities. In November 2006 Ward emailed his investors, “There are no funds left in JNF as all monies have been misappropriated.” In a handwritten confession that Ward gave his wife and that was later given to the FBI, Ward wrote of much personal distress and even the possibility of taking his own life over his guilt. In that context, he wrote that he “felt like a financial serial killer” and “just another scumbag con artist bilking old people out of their retirement money.” He was later divorced. In August 2007, Ward pleaded guilty to nine felony counts, including fraud and money laundering. The U.S. Attorney’s office claimed that Ward defrauded more than 100 clients out of more than $11 million. Separately, Ward is alleged to have defrauded investors in a Mississippi real estate project.
These criminals have given Forex a bad reputation, as explained in the Wikipedia page Forex Scamsvii
. FX TRADER MAGAZINE July - September 2011 17
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