A pair of company chiefs turned rogue traders afte

A pair of company chiefs turned rogue traders after lying about the success of their dealings in the highly volatile foreign exchange market, a court heard today (Tues.

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Despite Sterling Foreign Exchange suffering ‘disastrous’ losses, John McIntyre and Albert Alonso continued to herald initial success as a true reflection of their ‘highly professional’ organisation based in Horsham, West Sussex.

And the pair refused to allow accountants to update profitability statements but, instead, continued to send prospective customers figures from the earliest days of trading – when they boasted a 55 percent profit in the first three months.

Michael Wood, QC, prosecuting, told London’s Southwark Crown Court that to do so was ‘grossly misleading and highly dishonest.

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And he said far from being run by a ‘small team of professionals’, Sterling was ‘at best, distinctly amateur, and at worst, shambolic.

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Alonso, 33, of Livingstone Road, Tilgate, Crawley, Sussex, and McIntyre, 40, of Dorchester Gardens, Worthing, Sussex, deny fraudulent trading between March 1, 1995 and July 26, 1996.

Mr Wood said the two men were the share holders and directors of Sterling, the ‘bosses’ who ran the small company after recruiting staff through adverts in local newspapers.

He said private clients were offered a chance to speculate in minute changes in the exchange rates between various currencies on the same terms as the major international finance houses – a ‘gamble’ that could result in substantial gains or losses.

The risk was made perfectly clear in advertising, he said, but the Crown did complain about clients being misled over ‘picture’ Sterling gave itself.

‘All the more important because of the risk or volatility, for clients who entrusted Sterling with money, to be given a fully accurate and honest picture of the company with whom they were embarking on this speculative form of trading,’ said counsel.

The jury were told that at the time foreign exchange trading was not subject to the provisions of the Financial Services Act, and therefore, not regulated by the Securities and Futures Association.

Mr Wood said it was not alleged Sterling was set up as a vehicle for fraud, but got into difficulties and by August 1995 trading was ‘disastrous.

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In something like 15 months, he said, pnds stlng 1.

5 million had been invested but losses had mounted to pnds stlng 750,000 – something like 48 percent.

And of 82 ‘external’ clients, recruited by ‘cold-calling’ or mail shots, only eight could show a profit.

He described the company brochure as being ‘downright dishonest’ in its claims.

Mr Wood said the reality was that from August 1995 new investment in Sterling was used to cover losses on the company trading account with a market maker.

He said there were repeated calls for cash to make good losses – otherwise Sterling could not trade.

‘This makes it clear how the claimed ”small team of professionals” were not doing well,’ he added.

The jury were told in two different Sterling brochures circulated by the company, the ‘professionals’ twice got their maths wrong showing an example of how profits could be made on the market – claiming profits when the deal clearly showed a loss.

‘If the company people do not know what they are doing, what does that say for professionalism? They mark themselves out as professionals but cannot even get their sums right.

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The trial continues.

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