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Forex scammer fined $1.8m

Foreign exchange traders are coming under increasing scrutiny after a series of scandals

Foreign exchange traders are coming under increasing scrutiny after a series of scandals

Foreign exchange markets are starting to get increased attention from regulators across the globe, and malpractice is receiving harsher penalties. The latest example of such a penalty is the fine of $1.8m US trader David Prescott was ordered to pay recently.

The CFTC announced that Prescott had been found guilty of persuading people to invest in a foreign exchange investment pool between June 2010 and April 2013. He is said to have conned investors out of $455,000, much of which was used for his own personal benefit. It is the second time Prescott, previously known as David Weeks, has been found guilty of such an offense, having been ordered by the CFTC to pay back $1m to defrauded customers.

The CFTC say they have clawed back the $455,000 to compensate victims of the fraud, as well as $1.35m as a civil monetary penalty. Prescott has also been permanently banned from engaging in any more trading activity.

Regulators are increasingly taking a tougher stance to the foreign exchange markets, in a concerted effort to restore public trust in what many perceive to be a cutthroat financial market. The UK’s FCA said it would look at installing the first set of rules for the multi-trillion dollar market, after it completes a series of probes into possible forex benchmark manipulation. Regulators in the US and Asia are also thought to be considering similar actions.

 

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