fx

This is not the first time an auditor missed a fraud and they are already proposing even easier rules.

David Choi ran a hedge fund called Mars FX. Wharton graduate. Worked at TPG Capital. Every credential you would want to see. The fund posted 19% returns every single year with zero losing months. Not one, Ever.

That alone should have been the red flag.

No legitimate fund in history has never had a single losing month. Markets go up and down, Every fund takes losses at some point.

A fund that never loses money is not a good fund. It is a fund hiding something.

Investors saw the returns and wired their money in anyway. By February 2024 Mars FX had collected $331 million in the US fund alone. Total exposure across all funds was close to $600 million.

Here is where it gets worse.

Novus, the firm managing the money, told investors their cash would go to a secret technology partner in the British Virgin Islands that would handle all the actual trading. They refused to name this partner.

They called it "proprietary and sensitive." Investors handed over hundreds of millions of dollars to a fund that was sending it to a company they were not allowed to know the name of.

That company later identified as TRFX, claims its platform stopped operating in 2022. Mars FX was raising hundreds of millions from investors in 2023 and 2024.

The technology partner they were telling investors was running their trades says it had not been operational for two years.

Now here is the Deloitte part.

Deloitte is one of the four biggest audit firms in the world. They audited Mars FX every single year.

They issued clean opinions every single year. According to the lawsuit filed against them, Deloitte signed off on the financials without independently verifying that the assets actually existed.

The 2024 offering documents showed the technology partner was neither a licensed broker nor a regulated custodian. Deloitte's audit the same year noted no significant changes.

$600 million is now missing. Lawsuits are open in three countries. The FBI and a grand jury in Manhattan are investigating.

The SEC, CFTC, UK's Financial Conduct Authority and BVI regulators are all involved.

One investor, a 70 year old small business owner from Arizona named CarolAnn Tutera, lost money in the GPB Capital fraud years ago and now lost money in Mars FX. She said: "I'm really fed up with finance guys on Wall Street."

She was defrauded twice. Both times the system that was supposed to protect her failed completely.

And this week, while this story was breaking, US regulators formally proposed eliminating filing requirements for smaller hedge funds and reducing disclosures for larger ones.

They are also cutting enforcement staff at the agencies responsible for catching exactly this kind of fraud.

$600 million missing.

Auditor saw nothing, Regulator caught nothing And the government's response is to make the rules even easier for the next one.

Nobody has been charged. Nobody knows where the money is. And the investors who lost everything are now being told to wait for a legal process that, with reduced enforcement staff and fewer disclosure requirements, has never been less equipped to help them.

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