9th January 2015
A forex fraudster has been found guilty of one count of fraud after duping £5 million from investors, encouraging them into an unauthorised collective investment scheme.
Alex Hope was found guilty of one count of fraud at Southwark Crown Court after previously admitting a charge of operating a collective investment scheme without authorisation on 23 April 2014.
The scam claimed to make large returns for investors from the profits of Hope’s foreign exchange (forex) trading. Between March 2011 and April 2012, Hope took over £5 million from investors and spent £2 million of the cash.
He told investors he would trade their money on forex markets, holding himself out to be a talented and successful trader would could make returns of 100% in just a matter of months.
In reality, his trading was heavily loss making, losing £500,00 of the £650,000 in his trading accounts.
Prior to the trial Hope’s co-defendant Raj Von Badlo – also known as Raj Shastri – had pleaded guilty to an offence of recklessly making false representations to investors and further offence of promoting a collective investment scheme without authorisation in July.
Georgina Philippou, acting director of enforcement and market oversight at the Financial Conduct Authority, said: ‘Using fraud and false promises, Hope took in those who trusted him to invest their money.
‘He promised fantastic returns but, as is so often the case with unauthorised investment schemes, those who invested ended up with significant losses and the main beneficiary of the scheme was Hope himself.’
She warned consumers that unauthorised collective investment scheme s – or Ucis as they are known – are ‘often incredibly risky and if the promised investment returns seem too good to be true then they most probably are.’