FX Quant > About Forex Fraud
It still never fails to amaze us that some traders/investors still think that fancy software, slick websites and big marketing operations make them money. We can inform you, but feel it is most important you are aware and educated a little so you can see the difference with us, and benefit from our experience and knowledge.
Below are some warnings and
excerpts, some from the The United States Commodity Futures Trading
Commission (CFTC):
Stay away from companies that promise little or no financial risk and/or avoid any company that predicts or guarantees large profits with little or no financial risk. Be suspicious of companies that downplay risks or state that written risk disclosure statements are routine formalities imposed by the government. If in doubt, don't invest.
Avoid any company that predicts or guarantees large profits
Be extremely wary of companies that guarantee profits, or that tout extremely high performance. Some advertisements may claim that seasonal trends in the demand for certain commodities or well-known current events create an opportunity to make big money by trading in commodity futures and options. The advertisements and infomercials promise quick riches – such as turning $5,000 into $20,000 in just a few months – with predetermined risk. In many cases, those claims are false.
The
following are examples of statements that either are or most likely are fraudulent:
"We guarantee you will make at least a 30-40% rate of return within two months."
"Turn $300 into $30,000 in as little as 6 months trading Forex!"
Be wary of sending or transferring cash on the Internet, by mail or otherwise
Be aware
that if you transfer funds to firms and NOT a counter party such as a bank or
regulated institution (Futures Commission Merhant - FCM) in YOUR NAME it may be very
difficult or impossible to recover your funds.
Stay away from opportunities that sound too good to be true
Always remember that there is no such thing as a "free lunch". Getting your money back once it is gone can be difficult or impossible.
Commodity pool operators often solicit investments from friends, neighbors, co-workers and fellow religious or social group members by using their reputations in the community or their personal relationships. In many cases, however, the investment schemes turn out to be fraudulent, and investors lose their entire investment, in many cases as a result of outright theft. Individuals and firms that fraudulently solicit funds from investors for commodity futures and options trading are usually not registered with the CFTC. They may operate “Ponzi” schemes in which little or none of the money sent in by investors is ever invested as promised – in the commodity markets. Instead, the operator of the scam steals the funds, and creates the illusion of a successful business by using some of the money put in by later investors to pay phony “profits" to earlier investors. This tactic makes it appear to investors that the investment is actually making money, which in turn attracts additional investors. Be wary of such payouts if you do not fully understand the source of any purported profits.