Serious allegation to IronFX !!

[Ahmed Mahmoud]

Many times we see different articles and allegation against brokers but we rarely see as much details and as much investigation by a journalist or a TV channel, which not just opened the case but made the company go and do comments about the case and encourage an ex employee ( as he describes himself to be) to go and talk about how did the company start and what are the practices followed to bring in new clients , new funds and how employees and clients are treated.


To brief you about this issue the article is published by Forex Magnate (http://forexmagnates.com/ironfx-gri...es-criminal-fraud-investigation-filed-on-air/)
and is about a series of TV shows in where a Chinese journalist is trying to investigate serious allegation against IronFX specifically from IB’s or as they are described Affiliates. Allegation was related to the following Points:

1- IronFX’s MT4 trading platform had suddenly stopped working, causing major losses for investors.

2- Not paying Commissions to Affiliates as agreed due to policy change “In the first two months, IronFX paid the promised amount of commission to the affiliate. But starting from the third month, IronFX claimed that the commission policy had changed and according to the new policy, they were not qualified for commissions.

3- Clients deposit hitting clients accounts while actual fund cannot be traced to be leaving China.(what happens to the money??)

4- Having operations in china without obtaining a license while having some representatives of the company claiming to have reserved foreign currency with the Foreign Currency Regulation Bureau which it was confirmed that did not happen.


The company under pressure answered to the Forex Magnates with an announcement from the IronFX General Manager and Chief Compliance Officer about these allegation and accusations, remarking 3 main points:

1- “We do have legal opinions that our operations in China are legal and legitimate”. Does this allow you to have offices and employees in china?

2- With regard to the funding IronFX does not do anything different from what the whole industry does. ….If you do what others do does this make it right? And what do others do? Is it all others or some of the others? It is really a choking statement from a GM & Chief Compliance Officer in my own opinion!!!!!!!!!

3- They are very surprised by the false allegations and our lawyers are taking the necessary steps against the TV station. … Which part of allegations is false, all of it? Part of it? – The statement regarding funding is a kind of confirmation to what came in the investigation so is this the only thing that is correct? Or some other allegations are also correct?

Last please note an interesting comment mention from an ex employee(as he calls himself) who wanted to share whatever he/she knows around this company, Basically let me share with you some of the main points he mentions;

1- The company is run by one person who is the CEO who has assistance from his brother.

2- The company started with stolen client database of clients and IB’s and technology information from another FX broker who the brother used to work for before Iron, the brother that is now a share holder.

3- The current china CEO is also an ex employee of the mentioned FXbroker.

4- The company started in china by bribing the local police to close the offices of the ex FXbroker we talked about and started by taking their place by copying every aspect of what they were doing even the image of the company.

5- The company continued to head hunt employees who have access to large clients date bases.

6- The sales process is the most aggressive process that it can happen with high targets for sales people and very long working hours, he describes the office like a military camp run by the CEO with commissions on deposit and deductions in case of withdrawals. Some of the sales tektites used are described by this example include:
a. The power hour (People are forced to work standing and are not allowed to close the phone for 1 hour
b. The Wednesday pizza marathon were everybody works until midnight to eat free pizza.
c. The Monday morning email from the head of sales which is got letters with font size 25 telling sales people that if they don’t meet their targets he going to make sure to send them back to China on the next flight.
d. The shame list which is in public view inside the office which lists employees which are underperforming according to Ironfx Concentration camp rules.

7- Once marketing expanse went very high , new deposits could not cover so they had to go to cost cuts which included:
a. Open offices in Latin America with very cheap labor.
b. Reduce client acquisition cost, so no more commotions on volume and move to one off payment (CPA or cost per accusation) a model used by another big broker so copy this.
c. Do not pay for BI’s the CPA if clients are making money and this is what made the big story on china TV.

 

[IronFX Officer]

Thank you for your message.

Your constructive approach is appreciated and welcomed as it provides a sensible discussion forum for us to engage using facts rather than hearsay.

We are conducting an effort to clear what was indeed proven to be a multitude of repeated hostile, baseless and defamatory allegations by non-clients. This sometimes required us to take a forcefully factual approach in order to stop purely defamatory threads without a valid client claim.

Please see below a list of the undisputed facts regarding the Company:

1. We have been operational for 8 years, one of the longest established global Brokers.
2. We are regulated by the four premier regulators in the FX world (FCA, ASIC, CySEC and FSB) with full licencing and with an absolutely clean record of conduct. No fines and no warnings whatsoever. To this effect, we don’t think that e.g. the FCA would turn a blind eye to any misdemeanours.
3. We never breached any Capital Adequacy requirements in any of our regulated jurisdictions.
4. We have had the same auditors since inception with a clean audit record throughout.
5. We have not had a single Court judgement in any jurisdiction against us.
6. The “huge number of complaints” respond to a mere 0.2% of our client base, most are old and have been dealt with.
7. We have passed significant due diligence as part of various investment processes in our 8 years of operations. This has culminated in the recent investment by a regulated fund in our company.

The allegations merry go round (same things posted again and again in different threads) are as follows and concern 10 repeated statements which are presented below in no particular order:

1. “$176m in lost client funds”: see points (2) and (4) in the list above. We are one of the few Brokers that hold the client funds on-balance sheet and are therefore audited. Some regulators e.g. FCA also require daily reconciliations. The Auditor General’s report was a report by a non-expert criticising primarily CySEC processes. This was spun out as “confirmation of a $176m hole”. We have taken measures since to correct this misunderstanding but unfortunately the report cannot be retracted as it is a mammoth annual report covering all departments of the Cyprus Government.

2. “Petitions in the European Parliament”: The last petition to the European Parliament in July 2017 plainly confirmed the sole jurisdiction of the Republic of Cyprus in dealing with any complaints against CySEC regulated entities. The statutes on National Sovereignty are very clear and any additional petitions (if ever lodged) will have a similar fate.

3. “German criminal cases against members of management”: to-date we are not aware of any cases against management. The German document that appeared in some of the threads was just a confirmation that no case exists. It was misrepresented as being a criminal case against management. On the contrary, we have won a seminal defamation case at the Munich Court against a paid-for defamator and we have obtained a cease-and-desist order.

4. “Clients are consumers”: we have won seminal court cases in this respect. The EU law is clear in this respect that clients are not consumers. The Cyprus Consumer Protection Service opinion was just an unfortunate and wrongful interpretation of the legal framework. We have initiate legal action in this respect. We also stress that this is not a Court decision.

5. “Unpaid rents”: against a misrepresentation of the decision of the Junior Court in Cyprus in a simple rent dispute. This was overturned in our favour at the High Court.

6. “BBC documentary”: this is purely a defamatory attempt by a disgruntled ex-client that happened to be an ex-BBC employee. Was spun out as a “BBC documentary”. No BBC documentaries exist on the subject matter and indeed no articles exist in the mainstream press (other than positive articles in e.g. FT or Wall Street Journal)

7. “Class action lawsuits”: we confirm none is in existence and we have never been notified of one. A couple of comments in threads concern shady law firms trying to procure unsuspecting clients. They never get anywhere as there are no real claims and no one is willing to pay legal fees.

8. “Legal action against one of our lawyers”: we have global operations and we engage a multitude a legal firms (c. 30 globally). We cannot comment on individual law firms and any case against a law firm is clearly not a misdemeanour against the company

9. “€335,000 fine”: this was a settlement with CySEC following their investigation of the 10-largest Cyprus Brokers in 2015. No party admitted wrongdoing and the matter is closed since November 2015. IronFX was the only company under investigation that did not receive a fine. All the remaining Brokers in the investigation received fines.

10. “Amazon Book”: this a free book that it is just a write-up of the points above. We have no additional comments as to the motives.

The facts indeed pay a very clear picture of an organised defamation attempt.

Should you have any specific, factual complaint, we welcome you once again to identify yourself as a client of the company by providing the relevant details (i.e.name and account number) in order to allow us to attend to any queries you may have. You can also write to us at [email protected] for any clarifications you may require.

Thank you