'Investors may be getting used to Wall Street scandals, but a mass arrest of foreign exchange professionals is still jangling a few nerves. The Federal Bureau of Investigation arrested about 48 currency traders who are believed to have defrauded retail clients out of millions of dollars, Reuters reported.
The FBI led the men out in handcuffs last night in Manhattan and several East Coast cities last night, according to reports. Charges against traders at more than a dozen firms are expected to be announced today, The Wall Street Journal said. In one case, employees at J.P. Morgan Chase (JPM, news, msgs) and UBS AG were accused of arranging deals that where their firms lost money, but firms who were customers made money. The workers then took kickbacks from the customer firms, the paper said.
An employee of Madison Deane and Associates told Reuters that FBI agents stormed its Manhattan office with guns drawn. The employee said an agent told workers that $4 million was stolen from clients and money was taken out of individual retirement accounts, according to a wire service account'.
this news isn't adding up. First, Morgan isn't about to milk someone's IRA.
I can see some of these retail forex shops being suspect in something like this (in fact, I'd be surprised if some of them weren't scams), but not the majors.
Would some mba at Morgan cause his firm to lose in order to make his client money and get paid off? I wouldn't think that's beneath the class of 1990. But that's not exactly skimming an IRA - a horse of a completely different color.
And 4 mil in the forex market? Uhm, that's not even a gnat.
Eliot Spitzer thinks he's God and a) he's very wrong and b) he must be paying people for leads.