No sooner is one form of fraud outlawed than another emerges. With leveraged foreign exchange dealings now subject to strict regulation, local fraudsters have turned to instead conducting such trades on the gold market.
Police believe several of the companies now under investigation, after complaints from job-seekers who lost large sums in leveraged gold dealings, had failed to obtain licences to trade in foreign exchange.
Those licences are required under the 1994 Leveraged Foreign Exchange Ordinance, which was introduced to stamp out similar instances of fraud in forex dealings.
A partial solution would be to introduce a similar licensing regime for gold traders, as the Commercial Crime Bureau is now suggesting. But since this proposal is only at a preliminary stage, it is likely to be several years before it can work its way through the cumbersome bureaucratic process and be passed into law.
In any case, judging from their present behaviour, the fraudsters would try to evade any such measure by shifting their dealings to other, unregulated, markets. The only way to avoid this is to draft more comprehensive legislation, which would also cover all precious metal and commodities markets which might be vulnerable to such frauds. But that can only be a long-term solution. So, in the short-run, a public education campaign is needed to warn the vulnerable groups upon which these fraudsters prey, such as poorly-educated mainland migrants, of the tricks which may be used to part them from their life savings.
More police raids on unscrupulous traders would be welcome.
