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Felix Shipkevich June 14, 2011

Israeli news organization Globes is reporting that Easy Forex Ltd, an online foreign exchange dealer, has been under investigation by the Israeli Police for months. The investigation was sparked by Shmuel Rozovsky, an Easy Forex investor who lost hundreds of thousands of shekels. He and five others  filed a complaint alleging that the firm engaged in foreign exchange fraud by promising customers easy profits when it really sustained itself on customer losses. The lawsuit caught the attention of the Israeli Security Authority, and was passed on to the fraud unit of the police.

A petition has also been filed with the Tel Aviv District Court to turn Rozovsky’s case into a class action suit, on the grounds that customers lost hundreds of thousands (if not millions) of shekels, in a small amount of time. Easy Forex has filed a motion to dismiss the petition, calling it “demagogic, full of baseless pronouncements and populist slogans, and factually and legally groundless.” The firm claims that its role as a counterparty in transactions explicitly appeared in its contract with customers.

In a previous suit settled in January, Easy Forex was ordered to pay $2 million shekels to customers who claimed they did not know that the company was the counterparty to their trades. Rozovsky first filed a complaint in August of 2010. When the police closed the file that November, he appealed the decision, stating that “urgent enforcement action is required here,” because “forex fraud, the subject of the complaint, has harmed and continues to harm a large public in Israel, and many people continue to fall into the forex companies’ nets, losing huge amounts of money.”

Easy Forex has denied the existence of any investigation: “We are unaware of any investigation. For a long time, a number of parties have been trying in any way possible to harm the company and extort money they don’t deserve from it.”

Read more about this foreign exchange fraud investigation and lawsuit.
Creative Commons License photo credit: Brooks Elliott

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