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City watchdog faces huge claim over 'rogue trader'
Nicholas Cecil5 Mar 2009
The City watchdog faces a huge compensation claim from investors who say it failed to act quickly against a suspected rogue trader, it was reported today.
They accuse the Financial Services Authority of not acting on serious concerns about the activities of Terry Freeman, the boss of GFX Capital Markets, which has collapsed with losses of £44million, according to The Times.
About 800, including footballers and Metropolitan Police officers, are thought to have lost money.
The watchdog apparently looked into the affairs of foreign trader Mr Freeman for at least two years, but is said not to have acted before the City of London Police was tipped off.
Mr Freeman was reportedly detained last month on suspicion of trading offences and money laundering, although his solicitor said: "Mr Freeman maintains his innocence and will be vindicated in the fullness of time."
The action is being launched by the GFX Action Group.
Separately, police and fraud officers are investigating suspected "mini-Madoff" scams. Richard Alderman, director of the Serious Fraud Office, said it was investigating hedge funds.
The Standard revealed last month that the SFO was looking at six cases of alleged swindling by financial institutions linked to the credit crunch, including banks. A seventh inquiry has since been launched.
"We are talking about quite large-scale fraud as a result of the credit crunch," said Mr Alderman.
Reader views (6)
Sadly the FSA appear to only ever be re-active rather than pro-active (which is what the public require in order to protect them). The FSA, a financial services regulator, is well past its "sell by date"!
A new DYNAMIC pro-active Regulator is NOW required for the finance industry! Perhaps those currently at the FSA could be utilized to regulate estate agents and the like? At least that shouldn't represent too much of a challenge for them!
- Fraser, Telford Park, 06/03/2009 00:40
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The FSA receives hundreds of suspicious activities, until it has hard evidence it cannot stop all these activities, so it is not only the FSA to blame. The IFA community is also at fault here, they would do due diligence on their products and not sell unregulated schemes run by non-regulated people. Also the law needs to change how can a previous criminal be allowed to change his name!!!! What is to stop Mr. Freeman, now becoming Mr. Notsofree and doing again, whilst awaiting a potential trial - nothing, anyone can change their name and get ligit ID - where is the law in protecting people here, not all the FSA's fault
- Jc., London, 06/03/2009 00:14
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They obviously did not read the small print!
- Yorkie, Stalbridge,Dorset, 05/03/2009 16:53
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Well Dc from London my son put his hard earned £5000 into this fund. He also happens to be a modest earning tax payer, you are not the only one. It is not only rich footballers who would like to try and earn better interest on their money in the present economic climate . As for telling people to get over it - if a fraud is proven then it is illegal and if the FSA knew about this person and let him carry on then they have not done their job with due diligence. It does not matter if it is £10 or £1,000.000 fraud is fraud, it is illegal and no one wants to have their hard earned money taken from them.
- Vc, Essex, 05/03/2009 16:29
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excuse me? I am a modest earning tax payer, who lost a modest sized investment, the FSA is supposed to protect investors, and in this case has failed to do so.
- Mb, London, 05/03/2009 16:03
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The money is lost, get over it. I the modest earning tax payer am not prepared to compensate rich footballers!!!!
- Dc, London, 05/03/2009 13:03
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