5 January, AtoZForex.com, Lagos – The recent suspicions of fraud by Knight Capital Markets has led to the discovery of interesting details of the firm’s dubious dealings. First off, the firm operates as a clone, that is, using a name similar to an established, legitimate firm in a bid to deceive unsuspecting clients. In this case, the name “Knight Capital Markets” used by the clone is similar to a large American institutional trading firm “Knight Capital Group” which is listed on the New York Stock Exchange as KCG Holdings, Inc. Class A (NYSE:KCG). It is therefore important that this difference is clarified, so that these distinct firms are not confused for one another.
Suspected ponzi scheme operations
Knight Capital Markets is suspected of running a ponzi scheme, attracting large investments without a proper model to return profit, while promising high yields to clients. The firm is also seen to have engaged in high risk trading, resulting in huge losses, wiping out $10 million in just a matter of a few hours.
The firm popularized its activities by using services like myfxbook and ForexVerified. It also runs a brokerage outfit in the name Knight Capital Markets, while offering fund management services managed FX portfolio services through a sister entity called Fortress FX Fund. Knight Capital Markets attracted investment by using historical statements with high performance returns, in order to mislead potential clients.
Scheme perpetrator
As reported by financefeeds, information derived from a longstanding introducing broker who is close to the matter and has specifically requested to remain anonymous has clarified that the scheme is being run by an individual called Ethan Cooper, who claims to live in Butschwil, Switzerland. A very brief search on his performance as a fund manager will return some interesting figures, including a claim made in October this year, in which he states that he is based in Sydney, Australia and has made a 1,624% return on FX managed account trading. However, these claims have been discovered to be fictitious and not reflected in actual client returns.
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