CFTC files civil lawsuit against Monex claiming $290 MILL in consumer losses.
roadrunner
Posts: 28,303 ✭✭✭✭✭
$290 MILL involving 12,000 trading accounts. Would be the largest bullion fraud case in US history. No doubt a lot of this occurred following the Sept 2011 crash all the way into the 2015 and 2016 bottoms.
When all the sheeple bought stocks high in October 2007 based on lousy investment advice and tactics....how come there was no civil action by March 2009? And to think, the CFTC investigated JPMorgan for 5 yrs and couldn't identify a single instance of silver bullion trading fraud/illegality, not even their $200 BILL short position in silver derivatives in July 2008 (13 yrs of world production)....yet the gold market has been littered with such findings and numerous fines during the past 5 years....lol. They got Monex, Madoff and Tulving....just couldn't get JPM, MS, Citi, BoA, GS. 
I think most everyone that traded gold or silver "long" with leverage during the Sept 2011-Dec 2015 got their heads handed to them and lost everything.
http://www.cftc.gov/PressRoom/PressReleases/pr7609-17
I think Haynes Tulving lost $50 MILL or more on his own before going down to the Feds several years ago.
Comments
"just couldn't get JPM, MS, Citi, BoA, GS."
Perhaps they have more political clout, smarter lawyers than those that got convicted??
Too big to fail. Too big to take the fall. Money talks ... especially to politicians.
It is a loser's game. Don't know why we keep playing.
I wonder if it will ever actually go to trial....... probably not... Cheers, RickO
When all the sheeple bought stocks high in October 2007 based on lousy investment advice and tactics.
10 years later stocks have done quite well on that "lousy advice". Hopefully the PM bugs can say the same 2021 based on the lousy advice they received.
Knowledge is the enemy of fear
I never could justify doing business with Monex - they always seemed to ask too much and deliver too little for what they offered.
I knew it would happen.
I've started following this. FWIW, the $290M includes about $116M in market losses (of which something like $85M was due to leverage). And the $290M actually goes up to $325M if you include unrealized losses.
The CFTC's case hinges primarily on the Dodd-Frank Act of 2010. That passed, and then the CFTC issued guidance on what "actual delivery" is (Monex is not registered with the CFTC, which the Dodd-Frank Act requires with certain exceptions -- one of which is that Monex can do what they are doing if they "actually deliver" the metal within 28 days). Their final guidance was issued on August 23, 2013. Signs of the Monex investigation go back to November 1, 2013.
On March 20, 2014, the CFTC subpoenaed Monex. They refused, which started a lawsuit to force production of documents which the CFTC won, but Monex appealed. That caused much of the delay after March, 2014.
The CFTC thought of that. They say that between January 2, 2009 and July 15, 2011, "metals prices appreciated by a minimum of 80%" and that during that time, almost 57% of Monex Atlas accounts lost money, with a net loss of about $9M. To be fair, silver did go down about 24% from its recent high April 30 through July 15 (but gold went up another 18% in the following months before falling).
__When all the sheeple bought stocks high in October 2007 based on lousy investment advice and tactics....how come there was no civil action by March 2009?
Not sure comparing buying the S&P, equities or mutual funds, then having a market crash is the same as gouging customers in the quasi unregulated nefarious world of bullion sellers is very accurate.
Of course it's not, and never has been. But the PM bugs got nothing else. Lol
Knowledge is the enemy of fear
Can I sue because I lose ? I thought you had to snooze to do that.