844 scam victims sue investment bank CEO for fraud

by FAYYADH JAAFAR / pic by AFP

A TOTAL of 844 victims of a cryptocurrency and foreign exchange (forex) investment scam are suing the CEO of an investment bank for an estimate of RM3.6 million.

The lawsuit was filed in the Shah Alam High Court on May 27, 2022, by Farhanna Lim (Advocates and Solicitors) before High Court Registrar Syalia Ain Zainuddin.

Lim Kah Ee, a partner and lawyer at Farhanna Lim (Advocates and Solicitors), said the victims had lost their money through an online trading platform called FIPS.

She told The Malaysian Reserve that the lawsuit seeks damages for the victims, who are mainly from the UK, Indonesia, Singapore, Australia and Thailand.

“The initial trading platform was agreed solely for forex trading. Crypto was only introduced later and subsequently imposed on the victims. 

“The defendant blocked and barred all access to the forex trading platform and the victims were forced to invest in the crypto platform to regain access to their accounts, whether to initiate transactions or to trade,” she said. 

According to Lim, multiple “trading partners” were introduced on the facade to multiply the profits of the victims.

“We believe the accused is not alone in the scheme, but there are several others involved,” she added. 

She said the victims are mostly from small-income families, which is why some of them only invested about US$1,000 (RM4387).

“Many investors made multiple deposits, too,” she added.

Lim said since the operation was conducted in Labuan, the island’s special economic zone status does not absolve the perpetrators from legal action. 

“The Malaysian government has announced that Labuan is a specific and designated financial investment zone.

“Unfortunately, this platform is used to conduct financial fraud on bona fide investors, which is a rampant act these days. In respect of forex trading, it is permissible and legal in Malaysia under the Exchange Control Act, 1953.

“But it does not negate the fact that these victims have the right to commence legal action arising from any illegal and/or fraudulent actions orchestrated by these trading platforms,” she explained.