(A DETAILED ACCOUNT OF HOW THE MANILA INTERNATIONAL FUTURES EXCHANGE DUPED THE INVESTING PUBLIC FOR MORE THAN A DECADE)
You must have read or heard of a news story somewhere about a young, innocent girl being conned by a group of men into going with them to party all night with sweet promises of gifts and money. The innocent girl, enticed by their promises, went with them - her penchant for the promised rewards overshadowing her fear for her own safety. She ended up being locked up in a house for a long time and gang-raped over and over and over again!
This is the best way I can vividly picture to you the scam operations perpetrated by the defunct Manila International Futures Exchange from its inception in 1985 until it was finally issued a cease and desist order by the Securities and Exchange Commission in 1997.
The MIFE was established and headed by a Hong Kong-based British National who came to the Philippines touting the credentials of having headed the Hong Kong Commodity Futures Exchange sometime ago in the past. The Philippine authorities, mesmerized by the seemingly impeccable record of the foreigner, forgot all about conducting due diligence. They fell into the trap and approved the creation of a commodity futures exchange in 1985. The authorities were made to believe that the exchange will benefit Philippine farmers who are producers of copra, coffee, sugar, and soybeans, the four commodities to be traded in the new exchange. And so, the “rape” began!
Very few people knew the following details:
* That the Briton was actually a henchman of a group of Chinese businessmen-brokers who pulled a similar scam at the Hong Kong Futures Exchange (the Carrian Caper) in the past.
* That all the member brokers of MIFE were all inter-linked with each other and their operations were all funded by the same Chinese group
* That the Manila International Futures Clearing House which was supposed to be an independent entity in charge of clearing and auditing exchange transactions was actually owned by the same group and that the Filipino directors of both the exchange and the clearing house were mere dummies who never knew what was really going on (They were there just for the fee to put some semblance of credibility to the operations of both the exchange and the clearing house.
* That the SEC personnel tasked to monitor the daily activities in the trading floor were also under the payroll of the exchange, and for more than ten years they were there every single day but never really knew what their tasks were much less what they were supposed to monitor.
* That the volume transactions being reported by the exchange were all scam transactions and the supposedly actual trading being done daily by Filipino floor traders were actually being orchestrated by the Chinese dealers of each member broker shooting out instructions to their floor traders by phone all through out the trading sessions.
* That these Chinese dealers maintained phone hot lines connected to each other so they can manipulate the prices in all the four daily trading sessions of the exchange. They dictate how far the price must go up or down for each trading session.
What I have enumerated above are not mere allegations but first hand knowledge based on the personal contacts I had while working as an employee of some of the key players in this scam. For lack of space, I shall end my blog at this point with a promise that I shall share with you the details, and I mean the real details, on how this scam was pulled through. These series of revelations are actually meant to provide you with a better understanding of how forex scam operators conduct their business because spot foreign currency trading in the Philippines was an offshoot of the closure of MIFE.
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