One of the fastest growing markets for retail fx trading is in China. The only problem for forex dealers is that currency trading in China is illegal. The Chinese Government routinely rounds up underground forex dealers and introducing brokers but just as with the old prohibition laws the trading public seems to just ignore their communist masters and keep on drinking that moonshine.
But currency bootleggers beware: if you get caught you may wind up in a stank Chinese prison sewing sneakers together for Nike or stitching hula shirts together for Wal*Mart.
Such are the fates now of dozens of former introducing brokers for Northfinance and Forex.CH after a series of raids in mainland China.
Of course, no one should be surprised that Northfinance has once again gotten into legal trouble. They have long been an industry rogue and their recent purchase by FX Pro has done little to rein them in. But this does not bode well for Forex.CH, which is a Swiss based broker already reeling from the new banking laws in Switzerland that may put them out of business. It is going to be a lot harder for them to meet Swiss capital requirements now that their boys in China have been pinched:
Íâ¹ú¹«Ë¾Ë½¶ÒÍâ»ã ÍâÍø³´»ãÁ÷ʧ¼¸Ç§Íò-Íâ»ãƵµÀ-ºÍѶÍø
·¸×ïÍÅ»ïÀûÓÃÍøÂç·Ç·¨³´ÂôÍâ»ã30ÒÚÔª_ÐÂÎÅÖÐÐÄ_ÐÂÀËÍø
Since most people can’t read Chinese I’ll summarize below:
Quote:
On May 12, Shanghai police arrested a Russian citizen, who was the chief representative of North Finance, in addition to personnel from Northfinance’s IB, marketing, operations and accounting departments. According to Northfinance’s Russian flunky, there were more than 40 IBs working for NorthFinance, and each IB had to bring in more than 20 accounts to maintain their IB status. NorthFinance took RMB as client deposits, and all the money went directly to the flunky’s personal account, over 20 million RMB is now sitting in his frozen account.
On May 22, Shenzhen police arrested 13 people, all of whom were referral agents for GFX Capital Markets. From 2004 to 2007, they introduced a total of 184 clients to GFX. Forex.CH rebated $40 USD for every transaction, and clients had to pay an extra 80-100 RMB per trade. According to the prosecutor, clients made money in the beginning, but they all lost in the end. The referral agents avoided detection all these years by masquerading as a software company selling FX market analysis.
|
As I said before, China doesn’t play around. If they’re lucky these agents will be sent to a prison factory to spray lead paint on cheap Hannah Montana dolls but if they’re unlucky, well… take a read through Alexander Solzhenitsyn’s
Gulag Archipelago and you’ll get the picture.
Now, knowing the manner that companies like GFX and Northfinance do business and knowing that they have been unregulated for many years why on earth would anyone open an account with such an outfit?