Tokyo Employees Arrested for Unauthorized FX Trading Scheme

Tokyo Company Employees Arrested for Unauthorized FX Trading

Tokyo Metropolitan Police have arrested four employees from a company for engaging in unregistered foreign exchange (FX) trading. The suspects allegedly collected over 1.6 billion yen from more than 1,500 customers, according to reports from Jiji Press.

The accused violated the Financial Instruments and Exchange Act. Police have not disclosed if the suspects admitted to the charges.

The four individuals promoted their service by claiming to operate a “mirror trade.” This system automates trading to replicate the strategies of professional investors.

From February to November last year, the suspects conducted FX trading without proper registration. One specific case involved approximately 8 million yen from five customers, including a woman in her 50s from Osaka Prefecture.

One of the suspects, Takashi Iwai, operates an FX trading website. Another suspect, Hamamoto, recruited clients through investment seminars, assuring potential customers that using mirror trades would guarantee profits. He also received referral fees from Iwai.

The scheme came to light when a customer reported an inability to withdraw funds to the police in November last year. Subsequently, the trading website was shut down, and customers were not refunded.

Authorities estimate the suspects raised around 1.6 billion yen from clients between March 2019 and November 2023. Investigators are continuing to explore if other legal violations occurred.

The National Consumer Affairs Center has urged potential FX traders to verify if companies are registered as financial institutions. They warn consumers against engaging with unregistered companies and encourage reporting any concerns to consumer affairs centers or hotlines.