Federal agents yesterday began rounding up 48 currency traders suspected of bilking their clients after a daring, months-long undercover probe, sources said.
The first raids took place at Two World Financial Center and in Jersey City’s “Wall Street West.”
At least 10 well-dressed suspects were hauled out of the Financial District building in handcuffs, hiding their faces with coats after armed FBI agents stormed onto the 36th floor of the skyscraper shortly before markets closed.
Agents busted at least seven surprised suspects holding a secret meeting – set up by an FBI infiltrator posing as a crooked currency trader – at the offices of Madison Deane & Associates, law enforcement sources told The Post.
“They had guns. They came in with vests and said ‘Nobody move!’ ” said a shaken employee.
Among those busted were some of the firm’s highest officials, the employee said.
As much as $4 million was involved in the alleged frauds at Madison Deane, one source said.
Three more suspects were snared in Jersey City at ICAP. Other arrests were made at Prebon Yamane USA in Jersey City, sources said.
Officials of the three firms could not be reached for comment.
Some of the frauds, which sources said involve well over a dozen firms, were done by traders without the knowledge of their companies, a source said.
More arrests were expected today as other suspects are taken into custody at various locations, including their apartments and country homes, the sources said.
The multimillion dollar scams, detailed in papers filed under seal in Manhattan federal court, includes charges that rogue traders took cash from unsuspecting clients but pocketed the money instead of investing it in the volatile, unregulated currency market.
Tens of billions in foreign currencies are traded daily in New York, and millions of dollars can be wiped out in just seconds, giving unscrupulous traders an easy explanation for their frauds, a source said.
“This has been a long undercover investigation,” said the source.
“It’s big and involves a lot of very complex dealings.”
Authorities call it one of the biggest crackdowns in years in the vast foreign-exchange market here, which isn’t regulated the way stock markets are.
U. S. Attorney Jim Comey and the FBI had no comment on the arrests.