Financial Crime World

Uncovering the Types of Financial Crimes in Cyprus

Cyprus, known for its thriving investment environment, has unfortunately been plagued by financial crimes. These illicit activities have left victims reeling and seeking justice. In recent years, cases of forex companies making unsuitable investment suggestions to inexperienced investors have surfaced, resulting in significant losses.

Common Forms of Financial Crimes

  • Classic pump-and-dump schemes
  • Market manipulations
  • Fraudulent practices
  • Stealing and blackmailing
  • Tax fraud
  • Cyber-hacking related to crypto-currency trading
  • Inducing people to invest in financial products that are unsuitable given their trading history and other factors

Global Impact of Financial Crimes

  • The Royal Bank of Scotland LIBOR-manipulation scandal
  • The Madoff Ponzi scheme
  • A recent insider trading case involving Deutsche Boerse AG

These cases have led to significant fines and penalties for those involved, serving as stark reminders of the global impact of financial crimes.

Challenges in Cyprus

  • Victims may not even be aware that they are victims until it’s too late
  • Financial industry experts should abide by financial regulations, but unfortunately, this is not always the case

EU Legislation to Combat Financial Crimes

  • The EU’s anti-money laundering directive and the fifth Anti-Money Laundering Directive aim to increase transparency in the financial sector and prevent illicit activities.

Seeking Relief in Cyprus

  • Victims may seek relief under Section 32 of the Court of Justice Law (14/60), which allows for interim orders such as freezing orders and prohibitory injunctions.
  • The U.S. Securities Exchange Commission and the Commodity Futures Trading Commission also have laws in place to address financial crimes and impose criminal and/or civil penalties.

Alternative Forums for Resolving Disputes

  • Arbitral tribunals, such as the Financial Industry Regulatory Authority (FINRA) in the United States, can provide an alternative forum for resolving disputes.
  • In some cases, victims of financial fraud may be able to seek relief under U.S. laws even if they are not U.S. citizens or residents.

Conclusion

Harmonized financial-crime legislation is crucial for protecting individuals and preventing systemic risk. While it may be difficult to completely eradicate the occurrence of financial crimes, the implementation of legislation with harsh penalties for violators allows victims to seek justice in courts and tribunals.