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An Auckland foreign exchange trader is facing 15 charges of theft, dishonesty and false statements in a case involving the alleged misappropriation of $837,046 for personal use and mis-statement of clients' financial positions by some $4 million.
The circumstances of the charges, lodged by the Serious Fraud Office in the Auckland District Court, bear similarities to the Financial Markets Authority swoop late last year on Ross Asset Management, now in liquidation, which allegedly held customers at bay by claiming fictitious earnings from funds invested on their behalf.
The latest charges are against 42-year-old Rene Alan Chalmers, a principal of Chalmers Cameron Investments Ltd, which traded from 2007 until being placed in liquidation last May, owing investors approximately $US5 million.
The charges of theft by a person in special relationship, dishonestly taking or using document and false statement by a promoter relate to foreign exchange trading on behalf of clients, and to three property purchases occurring in 2011 and 2012.
Mr Chalmers began receiving money from family members and friends through CCIL for the purpose of forex trading in 2007, the SFO says in a statement, and lived in the United Arab Emirates from 2007-11.
From 2009, he started accepting funds from colleagues and acquaintances.
"Although investors believed they were giving Mr Chalmers their money for the express purpose of forex trading, Mr Chalmers was using investor funds contrary to the agreement(s) under which they were accepted and reporting false gains to investors via monthly or quarterly investor statements," the SFO alleges.
"This case continues the current string of investment advisor and broker cases coming to our attention," acting SFO chief executive Simon McArley says.
"Those receiving money from others for investment need to be continually conscious of the need to use that money only for the purpose it was given to them and to be truthful when reporting to clients on the position of their investments."
Mr Chalmers has been remanded on bail and will reappear on February 13.