July 9, AtoZForex.com Lagos – The activities of fraudsters know no bounds as they constantly innovate on ways to scam unsuspecting individuals and institutions. Some of the more regular cases of fraud involve firms seeking to defraud clients. Here, the opposite is the case.
As reported by Bloomberg, Fortelus Capital Management LLP fell victim of a scam, in a case that displays the ultimate weakness in human psychology. The finance chief at Fortelus Capital Management LLP got an alarming phone call just as he was getting ready to leave work on a Friday. The caller claimed to be from Coutts, the London-based hedge fund’s bank. The caller claimed that there may have been a fraudulent activity on the account. He then requested that Thomas Meston, the Fortelus Chief Financial Officer generates codes using the bank’s smart card security system for the caller to cancel 15 suspicious payments. The CFO was reluctant, but the emotion of fear prevailed, and he then did as asked.
This kind of scam, though not uniquely a Hedge Fund Scam is popularly referred to as "Friday afternoon scam", as fraudsters make use of this timing to perpetrate their deeds because they understand that workers a susceptible to being tricked during such hours due to anticipation of the weekend, having only half their minds at work.
When Meston logged on to the firm’s online bank account on following Monday, he saw that 742,668 pounds ($1.2 million) was gone. Unfortunately, for Meston, Coutts, a unit of Royal Bank of Scotland Group Plc, had no record of the Friday phone call. Fortelus Capital had been conned, and Meston was the man who made it happen.
Meston has been terminated by Fortelus and is being sued by the fund, which says “he breached his duty to protect its assets”. Meston denies he was negligent and says he acted honestly, according to his court documents in the case. Meston “believed that he was preventing a fraud from being carried out against the claimants, and this belief was reasonable,” his lawyers said in court filings.
Fortelus clarified via its lawyer that no client funds were affected by the breach, as investigations are on going. Fortelus has “strong internal policies against fraud prevention” and this was “an isolated incident,” the lawyer said.