What's Wrong with Crown Forex?
Compulsive Writer, Forex Peace Army
Crown Forex should be one of the best brokers out there. It has a large customer base and is supposed to have a lot of money in the bank. Unlike a lot of "semi-Swiss" brokers that just have a virtual Swiss office, Crown has a real office in Switzerland and is a member of ARIF.
There were the usual complaints about and requotes in the broker reviews at Forex Peace Army, but almost all brokers get those kinds of complaints some of the time. Plenty of bad traders blame the broker when trades go wrong. In Crown's case, a lot of big traders used them and reported no serious issues with deposits and withdrawals. Then, around the beginning of September, 2008, something seemed to go terribly wrong with the withdrawal process.
In late September and early October, the FPA began to receive complaints against Crown. It started with 2 people and quickly escalated to over 1 dozen traders who were unable to get money out of their accounts. Most also reported that Crown had stopped replying to emails. FPA Investigator Tessa eventually asked one of the moderators to create a single thread for all the people to post in to make it easier to organize a group to address Crown Forex issues.
A lot of people complain to the FPA if a withdrawal takes over a week. This was different. These were not brand new traders who panicked after a 2 day delay in withdrawals. These were professional traders and account managers. All of them had been trying to get an answer from Crown for at least several weeks. Most of the accounts were over $50,000. Those that phoned were frequently promised that transfers would take place "very soon". The amount of money disputed quickly exceeded $1,000,000.
Not only was Crown ignoring withdrawal requests, but there were suddenly large MF charges leveled against several of the accounts in question. A few phone calls revealed these were maintenance fees placed on swap free accounts. All the traders involved seemed very surprised to find this form of fee being applied retroactively and could find no mention of these fees in their no swap, no fee trading agreements with Crown. One trader was promised that these new fees would be waived, but Crown's representative would not answer questions about waiving these fees for the other accounts. Several traders also reported having profitable positions removed, even though there were no issues with margin.
Some of the traders were told they could get their money transferred, but only $50,000 per week. Tessa directly asked a Crown Forex representative about this limitation more than once, but never got an answer. When some money did begin to flow, some traders owed over $50,000 seemed to get their money all at once. Others got one payment, and are waiting on the rest of their money. One trader only finally got Crown to acknowledge that he had an account after the FPA and the trader both sent the account info to one of Crown's managers several times over the span of 1 month.
One of the few answers that Crown did offer to the FPA was that some of the delays were due to traders changing banking info, so the new bank accounts had to be properly linked to the trader to comply with AML regulations. This would be very reasonable, except that the bulk of the traders involved had not changed any of their banking info and were using the same accounts that had previously been used to make deposits and withdrawals.
Two of the traders who did get money reported some unusually large transfer fees. $400 in one case and $800 in another. Both traders asked Crown about this and neither has reported getting an sort of real explanation yet.
At this time, at least one of the traders has retained a lawyer since Crown only paid him the first $50,000 on November 17th and still owes him a considerable sum. Crown Forex didn't make the promised payment the next week and have continued to sit on his money while not responding to messages he sends or those sent from his lawyer.
One possible answer for all this foot dragging on withdrawals by Crown Forex is that they have applied for a Swiss banking license. To get this, they need a minimum amount of money in the bank. The delays processing withdrawals for the traders who complained to the FPA meant that they more than 1 million extra dollars in the bank during this application process. There's no way to tell how many other traders are still fighting to get their money out of Crown Forex and just how large a sum that represents.
All of this means that I truly have to wonder what percentage of Crown's deposits needed to meet Swiss regulations should have been returned to traders weeks or even months ago. I doubt the auditors in charge of helping verify things have been made fully aware of just how much money Crown is returning to traders as slowly as possible, if at all. Is it possible that Crown Forex would really not meet the minimum requirements for that license they want if all the money owed had been returned to traders in a timely fashion? Does Crown have any other fiscal issues that they are using that money to conceal? I doubt anyone outside of Crown Forex's senior management really knows. I do know that these reports make it look like something is seriously wrong at Crown.
Crown Forex Problem Sign-In thread in FPA's Scam Alerts Folder
First Crown Forex Complaint
Second Crown Forex Complaint
I'd like to thank FPA Investigator Tessa for providing me with the information needed (minus names, account numbers, and other identifying details) needed to write this article.
Results 1 to 10 of 20
Thread: Big, Swiss, and Safe?
12-11-2008, 08:35 AM #1
Big, Swiss, and Safe?
Last edited by Pharaoh; 12-11-2008 at 09:08 AM.
12-11-2008, 11:01 AM #2
Swiss regulation Re Crown Forex
I have been checking on Crown Forex SA - in the Corporate registry of the Canton of Jura. There is one major troubling fact about this company and a few smaller ones. I have my serious doubts about the quality of this so called "broker":
Since 2006, they have changed their auditors (mandatory to have one) THREE times. The latest news about this comes on November 10 of this year 2008 when their last one resigned. There is NO way in this world that they would ever get a Swiss banking license when there is currently NO AUDITOR listed.
Look at the list of managers, their names and locations - there is not much "swiss" about that.......
Just to let you know: Sometimes it's better to report them to the Swiss Authorities who oversee such companies, and do this AFTER you complained to the ARIF (Members)
You should know as well that regulatory "oversight" here is private and they are called SRO's (Self Regulating Organisation) of which you must be a member when you're dealing with third party monies. They do NOT have any sort of regulatory power, much less "enforcing" anything. They are institutions where members get information about the latest laws and regulations mostly about money laundering laws. But it is indeed helpful to file a complaint about a misbehaving member - they are then forced to act and report the company if there is evidence of wrong doing
12-11-2008, 05:03 PM #3
Crownforex increases its share capital
Crown Forex has increased its share capital to 4.5 million Swiss Francs as one of the primary steps towards the banking license.
Crown Forex is in the transformation process to become a private bank and it is taking all the necessary measures to be fully compliant with the Swiss Federal Banking Law by the first quarter of 2009.
This increase is only part of the total capital increase planned by Crown Forex. The total capitalization will amount to approximately 15 million Swiss Francs, amount in line with the capital required in order to receive the banking license. This will insure the companyís compliance with the Swiss Banking Regulations and, most importantly, it will provide high measures of security for our esteemed clients.
12-11-2008, 08:43 PM #4
I thought so
Looked like a shabby company when I was entering forex and exploring all brokers. They survive on 1 pip spread, Now that's hard living in swtizerland. I also remember frequent downtimes of their website which atleast a professional company cannot afford. On top, I remember having read some adverse remarks on that company. Glad that all members of FPA know them well now.
12-12-2008, 01:46 AM #5
The Swiss Authorities are neither blind nor deaf, they will hear about the complaints sooner or later, and if there is the slightest problem like it has been described in this forum, the denial of the banking license is a given.
Additionally, as of today, there is still no auditor listed which is a regulatory must - and it must be one of the reputed ones.
It is rather doubtful as well to get a license when the top management in fact resides in Amman, Jordan. Please, nobody accuse me here of any racism
Canceled trades are simply illegal in my humble opinion. If the trade was properly executed, there is just no way to reverse such action - unless one cooks the books, or worse it's a front and no trade has ever actually taken place. Naturally, if the "broker" himself is the one taking the opposite side of the trade, anything goes... A proper audit of the books will reveal such things and several auditors have already resigned....... Maybe one ought to request information to which banks they are linked to execute the trades?
Read always the details in official publications, understand its meaning, then draw your own conclusions. If you're in doubt, contact their SRO, complain or at least request information (valid for Switzerland only).
12-12-2008, 10:15 AM #6
Act of robbing Peter to pay Paul.
Must the Crown Forex rob Peter to pay Paul because of the issue of taking banking license? Must they cut corner to do so? Must they because of their comfort put other innocent traders in a state of discomfort? This is a monumental fraud which MUST be brought to the knowledge of the appropriate authority that issues out banking license in Switzerland.
A pragmatic way of determining a person's greed is by first giving him a small piece of meat, the speed at which he grasps it from you will determine his level of greed.
Therefore, if the Crown forex with the broker's license could treat its numerous customers with disdain then what will happen if it eventually secure banking license?
I'm therefore, suggesting that if found to be true that Crown forex is about getting Swiss banking license, the FPA could act fast by bringing this atrocity committed by it to the Swiss Central bank's notice or the appropriate body that issues out banking license.
Finally, the problem of forex trading, apparently is these obnoxious brokers. The FPA should set up a think tank that will brainstorm of setting up its own brokerage firm through which members will be forex trading.
12-14-2008, 10:33 AM #7
here you go
SFBC - Frequently asked questions
It's in English, no further comment needed if anyone needs REAL answers about it.
12-15-2008, 07:01 PM #8
12-16-2008, 12:38 AM #9
Crown is no good,
All funds should be returned to their rightful owners, before Crown gets the banking License next year. It must have been terrible time for those traders who have not yet received their money, after all this time.
I was one of them. The ordeal started in September over a period of two months, everything was exactly what was said in the Forex Peace Army Forums. Could never trust Crown again.
Crown would close your positions, when it suits Crown (for Crown's benefit). Has any broker done that to you? Crown did it to me in September this year.
Keep thinking of you all, and hope you get your money back soon.
12-16-2008, 05:00 AM #10
According to the answer given by the Swiss Banking Commission today, there has been no banking license issued and none is in the works for Crown Forex.
Fact is that the laws have changed for Forex brokers on April 1, 2008 (no kidding here) with a transition period of one year - and Crown Forex has until March 31st, 2009, to comply. On this date the transition period ends and they need a license, not as a bank, but they be treated like a bank and are under supervision and regulation.
I believe this is what Crown Forex refers to when they say they applied for a private bank license - it appears to be nonsense because the law forces the license as a financial intermediary upon them. They MUST have a license to act as a Forex broker and that is all there is to it. Naturally, the supervision will be tough, books must be opened and audited by a Auditor accepted and recognized by the authorities.
This may explain why the last Auditor resigned and why there is such a mess.
This new regulation for Forex Brokers may put a few of them out of business in Switzerland. If the books do not live up to standard, there won't be a license.......
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