These Fraudsters Must Face Closure, not Just a Rap on their Knuckles
Uncouth, small-time cheats who completely knock down a country’s image manifest themselves in seemingly petty crimes that brutalize consumers.
An example will be Sim Lim Square’s Mobile Air outlet that brought a tourist from Vietnam down on his knees and sent Singapore’s fair reputation for a toss. Still, its owner remains unrepentant, bringing into focus the country’s lax laws in dealing with errant retailers.
Sophisticated Criminals: Then we have bigger but sophisticated criminals who cripple their customers by tampering with their finances and making it appear as if the investors are the culprits.
Banks that had been fined yesterday for rigging in the forex market that will have left their patrons badly bruised fall into the second category.
They are among the biggest names in the banking and financial institutions sector — Citibank, Morgan Stanley Chase. UBS, Royal Bank of Scotland and HSBC. Another offender, Barclays, is awaiting confirmation of the fine.
A report in The Guardian points out that in the UK UBS was handed the biggest fine, at £233m, followed by £225m for Citibank, JPMorgan at £222m, RBS at £217m, and £216m for HSBC. Barclays has yet to settle. In the US, the regulator fined Citibank and JP Morgan $310m each, $290m each for RBS and UBS, and $275m for HSBC.
£3.5 trillion a day Forex Market: While the fines may appear hefty, considering that the forex market sees trades to the tune of £3.5trillion a day, it is not a deterrent that will make them mend their ways. The profits in a market that is not well regulated are so huge the fines are just petty cash for them.
If we are right in seeking the closure of shops like Mobile Air, these banks must be wound up as well. If small fines are all they have to fork out they will be back to their crafty, evil ways the moment they pay up.
Citibank Campaign in Singapore: Recently while checking some forex sites I stumbled upon some ads from Citibank calling themselves a global leader (in cheating customers, perhaps) but bragging that in Singapore their forex platform(CitiFX Pro) is only for accredited institutional and expert investors (image captured within this blog). The implication is that they would pick their customers. Did they mean they will accept only customers who are either ready to be their partners in crime or gullible enough not to see through their frauds?
It is not just the forex markets that see banks indulge in fraud. I have no doubt that the stock exchanges too are witness to market manipulation. They are aided in this pursuit by that vicious community called analysts who suck up to businesses and come up with reports that can sway markets with or without any merit.
As someone with a reasonable exposure to both the forex and stock markets, I have often been sceptical about the buy and sell orders. There have been occasions when my sell trades had not been executed despite entering the queue early enough. I can gauge this from the volumes recorded.
It is possibly because brokers are able to manipulate the queues and enable their preferred customers to sidestep them. They can after all see in their systems what ordinary traders do not.
Whatever it may be, there is a need for tighter regulation to ensure retail investors are not shortchanged.
G Joslin Vethakumar