Forex involves trading one or more currencies against each other in an effort to profit from the rise or fall in their value. There are many ways in which you may invest in Forex, and some choose to make short-term trades while others choose to take long-term positions. However, if you take actions that manipulate the market or play a role in what the prices do in any way, you could be charged with Forex fraud.
What Is an Example of Forex Fraud?
Typically, you are allowed to both buy and sell currency at the same strike price at the same expiration date. You are also allowed to buy or sell options at a variety of strike prices to take advantage of price swings in your preferred time frame.
When someone says that you have committed Forex fraud, there is a good chance that someone has accused you of directly altering the market that sets the prices. This means that you have altered strike prices, altered the way that settlement prices are calculated or took other steps to artificially alter the reported value of a currency at a given time.
Having the ability to alter the market to suit your own needs is naturally an unfair advantage that threatens the integrity of the market itself. Therefore, you could face serious penalties if you are convicted of this crime.
What Are the Penalties for Forex Fraud?
There are usually civil as well as criminal penalties for a conviction of Forex fraud. You may be sentenced to several years in prison, probation or some combination of the two. Furthermore, you may have to pay a large fine in addition to restitution to either the market makers or the broker that was offering the trades that you profited from illegally.
It is possible that you will lose your ability to be a market maker or a broker in the future. You may also be banned from trading on the Forex market either directly or through the use of a third-party. Finally, your reputation as a professional and a person could be tarnished if you are convicted, which makes it imperative that you hire an attorney to help dispute the charge.
What Will an Attorney Do to Dispute the Charge?
As with anything that is done electronically, it may be possible to show that you weren’t the one who committed the fraud. Instead, an attorney may present evidence that your computer was hacked or that someone used your IP address to commit fraud in your name.
While this may take time to prove in an objective manner, it could result in all charges being dropped. It would also be a huge step toward clearing your name and helping you to restore your reputation as a trader and as a person who believes in the integrity of the market.
In the event that you have committed fraud, it may be possible to show that you didn’t mean to do so. Your attorney may also argue that you did so under the orders of a supervisor or someone else who compelled you to take illegal actions.
Even if you have committed fraud intentionally, it may be possible to earn a favorable sentence. This may happen if you plead guilty or agree to cooperate with authorities in an effort to catch others who may have engaged in Forex fraud or other illegal activities.
A charge of committing Forex fraud could create serious personal, professional and legal issues for you. Therefore, it is critical that you understand the charge against you, why you have been charged and what you can do to fight it. Remember, simply being charged doesn’t mean that you are guilty, and you have no obligation to admit guilt or do anything that could incriminate you.
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