FBI agents on Tuesday arrested about 48 Wall Street foreign exchange professionals in a sting targeting several top firms thought to have defrauded small retail investors of millions of US dollars.
FBI officers swarmed on 2 World Financial Center late on Tuesday afternoon and led out men in business suits, taking them away in vans and cars. Some of the men covered their heads with overcoats while others bowed their heads to hide from television cameras and photographers.
"It's currency fraud, securities fraud," said one agent at the scene of the arrests. "It's been a long investigation. The arrests have been ongoing today."
A Madison Deane and Associates Inc employee, who asked not to be named, said the FBI arrested seven people at his firm, which offers currency broker services.
"We were just sitting there working, and they [FBI] just came in and stormed the place," the man said, adding that the FBI agents took out three partners, three vice presidents and one broker all in handcuffs at about 5:30pm.
"They had guns. They came in with vests and said `Nobody move,'" the employee told reporters.
The worker said the FBI told Madison Deane employees that US$4 million had been stolen from clients and that money had been taken out of people's Individual Retirement Accounts.
At about 9:30pm, a reporter saw a group of FBI agents carrying about 20 boxes labeled "Madison Deane" from 2 World Financial Center, where the firm has offices on the 36th floor.
Madison Deane officials could not be reached for comment.
FBI agents began arresting brokers at the swank office building in downtown Manhattan shortly after 3pm and for about two hours led out handcuffed people dressed in business attire. FBI sources said the Wall Street traders will be charged with money laundering and fraud for swindling retail investors out of an undisclosed amount of cash over the past year.
Among other arrested in the massive sting were three brokers at the inter-dealer brokerage ICAP, which operates at a different location, according to another source.
NBC television reported the defendants scammed retail investors into thinking they were buying multimillion-dollar foreign exchange trades when it is not possible for those types of investors to participate in such deals.
A spokesman for the FBI declined comment but said the agency will hold a briefing yesterday.
Spokespeople for the US Attorney's office and the Treasury Department declined comment.
The unexpected operation came at a time when America's financial markets have been hit by scandal after scandal.
Corporate wrongdoing by companies like Enron Corp, which went bankrupt in 2001, sparked a massive accounting scandal and led to the demise of one of the world's largest accounting firms, Arthur Andersen. The scandal rocked investor confidence and unearthed irregularities at other companies.
Since then Wall Street equity research companies have been targeted by prosecutors for inflating stocks during the Internet boom of the late 1990s. More recently the mutual fund industry has been investigated on charges of improper trading.
Until Tuesday the US$1.2-trillion-a-day foreign exchange market, whose primary clients include top companies, millionaires and banks, has remained relatively untainted by scandal.
The names of other companies involved remained unclear, but sources told reporters that about four companies were targeted. Sources said none of the companies targeted are household names outside of the securities industry but are well known and regarded in the Wall Street community.
RESTRAINTS: Should China’s actions pose any threat to Taiwan’s security, economic or social systems, China would be excluded from major financial institutions, the bill says The US House of Representatives on Monday passed the PROTECT Taiwan Act, which states that Washington would exclude China from participating in major global financial organizations if its actions directly threaten Taiwan’s security. The bill, proposed by Republican Representative Frank Lucas, passed with 395 votes in favor and two against. It stipulates that if China’s actions pose any threat to Taiwan’s security, economic or social systems, the US would, “to the maximum extent practicable,” exclude Beijing from international financial institutions, including the G20, the Bank for International Settlements and the Financial Stability Board. The bill makes it clear that China must be prepared
PEACE AT LAST? UN experts had warned of threats and attacks ahead of the voting, but after a turbulent period, Bangladesh has seemingly reacted to the result with calm The Bangladesh Nationalist Party (BNP) yesterday celebrated a landslide victory in the first elections held since a deadly 2024 uprising, with party leader Tarique Rahman to become prime minister. Bangladesh Election Commission figures showed that the BNP alliance had won 212 seats, compared with 77 for the Islamist-led Jamaat-e-Islami alliance. The US embassy congratulated Rahman and the BNP for a “historic victory,” while India praised Rahman’s “decisive win” in a significant step after recent rocky relations with Bangladesh. China and Pakistan, which grew closer to Bangladesh since the uprising and the souring of ties with India, where ousted Bangladeshi prime minister Sheikh Hasina
Taiwanese trade negotiators told Washington that Taipei would not relocate 40 percent of its semiconductor production to the US, and that its most advanced technologies would remain in the nation, Vice Premier Cheng Li-chiun (鄭麗君) said on Sunday. “I told the US side very clearly — that’s impossible,” Cheng, who led the negotiation team, said in an interview that aired on Sunday night on Chinese Television System. Cheng was referring to remarks last month by US Secretary of Commerce Howard Lutnick, in which he said his goal was to bring 40 percent of Taiwan’s chip supply chain to the US Taiwan’s almost
The Taiwan Space Agency (TASA) yesterday released the first images from its Formosat-8A satellite, featuring high-resolution views of Hsinchu Science Park (新竹科學園區), Tainan’s Anping District (安平), Kaohsiung’s Singda Harbor (興達港), Japan’s National Stadium in Tokyo and Barcelona airport. Formosat-8A, named the “Chi Po-lin Satellite” after the late Taiwanese documentary filmmaker Chi Po-lin (齊柏林), was launched on Nov. 29 last year. It is designed to capture images at a 1m resolution, which can be sharpened to 0.7m after processing, surpassing the capabilities of its predecessor, Formosat-5, the agency said. It is the first of TASA’s eight-satellite Formosat-8 constellation to be sent into orbit and
RSS