Off-shore leveraged currency trading scams

Off-shore leveraged currency trading scams

Off-shore leveraged currency trading scams Canadian securities regulators are warning of new leveraged-based forex investment scams spreading on the internet. For advisors with clients who like to do some of their own trading, it is worth knowing that these off-shore “investment” offers are drawing a growing number of complaints. 

The audacity of some of these scams is remarkable.

The Alberta Securities Commission (ASC) is warning investors of what appears to be an illegal scheme to sell securities recently promoted on a Calgary radio station by TRID Pacific Investments. TRID representative Raymond Levine encourages Alberta investors to place funds in offshore accounts in order to access a new investment product known as "Contract for Difference Trading." These investments employ massive amounts of leverage to pull slight returns out of short-term currency trades.
The investment "opportunity" has been posted and promoted through on the radio station's website. The ASC warns that TRID is not registered to sell securities in Alberta, nor is it registered to do business in the province and that the company's actions are not in compliance with Alberta securities laws.

In the case of TRID, the promise is that for each $5,000invested, the company will leverage that bet up with $100,000 to allow the investor to make larger profits. The money "invested" is also moved offshore, which makes it more difficult, if not impossible, for investors to retrieve their money if something goes wrong.  TRID claims it is based Monaco, but funds are sent to accounts in Spain.

The leveraged currency scam in Alberta sounds similar to investments offer popping up in Quebec. There, the Autorité des marchés financiers (the "AMF"), is warning investors about Internet-based trading platforms in currency markets that use what are called "binary options" as a way of enticing investors. These currency bets can hardly be called "investments." Binary options--so-called "All or nothing" options--are a type of option where the investor faces two possible outcomes when his investment matures: either the investor receives a pre-determined cash payout or he loses his investment, hence the term "all or nothing". Typically investors are placing bets of $100 that the Canadian dollar will either move up or down in the next ten minutes. This is gambling, straight up, not investing.

Not surprisingly, the AMF cyber surveillance team has been receiving complaints from investors who believe they have been defrauded through the sites offering these trades. The vast majority of the sites offering these "investments" are located offshore. Those complaining to the AMF describe cases where clients are denied access to accounts and assets. Some complain of identity theft. "Some of these sites are pushing people to make investments.  At the start it can look very interesting. But we are asking the investing public to check these sites out. We have had a lot of complaints especially around these,” says Sylvain Théberge, a spokesperson for AMF in an interview with WP.  He points out these sites are illegal if not registered with the AMF. Again, the vast majority of these sites are offshore. “Who are sending money to...who knows where?” he says.

The AMF has generated a list (see below) of the sites offering these investments that are not registered in Quebec (and are therefore illegal). The list will be updated as the cyber surveillance team finds more offenders. Check the "Investor Warnings" section of the AMF site for the most up-to-date list.

The list so far: