Forex Warning

All too often the first hint of a Forex scam is when people start to complain about losing their money in a pyramid scheme. But, thanks to the British Colombia Securities Commission a Forex warning has been issued regarding an unlicensed company seeking to do business in Forex trading. AvaTrade reports how an unauthorized Forex firm is called into question.

The British Columbia Securities Commission (BCSC) has issued a warning against dealing with unauthorized Forex trading firm Eco Money Broker (EMB).

The announcement from the watchdog, dated April 14, 2015, said the broker does not have the necessary licenses to offer investment services in British Columbia. In the face of that, EMB has advertised its offering in the Canadian province and has allowed a BC resident to set up an account with the firm.

The company operates the website www.ecomoneybroker.com, presenting its services as a mix of high-yield investments, loans and Forex trading. No information is available on any licenses whatsoever, but the company provides an address in the United States (Miami, Florida). As you may suppose, being a legitimate US Forex firm requires a raft of registrations with US regulators and a range of permissions. LeapRate’s check has shown that EMB does not have any of these.

The BCSC reiterates that EMB is not registered in BC to trade in, or advise on, securities or exchange contracts. The regulator advises investors to exercise extreme caution when dealing with firms that are not registered to trade or advise in BC.

After the addition of EMB, the Investment Caution List composed by the BCSC features 128 entries. On top of numerous Forex firms that try to solicit investors from the province without the proper license, the list includes the names of many unauthorized binary options brokers.

To paraphrase the old Roman adage, let the trader beware! It is your money that you are giving people like Eco Money Broker and in the end it is your fault if you do not carefully check them out before your hard earned money is gone down the drain. Heed the Forex warning and contact authorities before dealing with these folks.

More Scams

Chron reports that a judge has ordered one Kevin White to pay $7.4 million for an investment scam

U.S. District Judge Richard Schell issued an order this week for White and the two limited liability companies that he formed, Revelation Forex Fund GP and KGW Capital Management, to pay $7.4 million in restitution and penalties. He also permanently banned White from any future trading.

White, 53, had earlier pleaded guilty to mail fraud and other misconduct related to the scam and was sentenced to eight years in prison in February.

The law did catch up with this man but not before he caused a great deal of financial damage. The Forex warning in British Colombia is a pleasant surprise as it may actually help folks avoid an investment and Forex scam.

And Even Worse Scams

A really sad story is posted by Bloomberg Business. As much as a billion dollars may have been scammed from Forex investors. The web site solicited money and talked about how easy it is to lose money trading Forex and how one really needs a professional to manage a Forex account. Like many such Forex scams the claims were really too good to be true.

The site said that those average gains of 1 percent daily couldn’t be compounded into an annual return. Even without compounding, those kinds of daily returns would amount to an annual gain of about 250 percent — or more than 25 times the average annual return of the Standard & Poor’s 500 Index, with dividends reinvested, for the past 50 years. Secure Investment didn’t provide that kind of context.

When investors wanted their money back they were delayed and then found that the web site simply disappeared. There is was no Forex warning in this case and as much as a billion dollars may have gone down the drain.