Some ‘forex’ funds are smoke and mirrors, warn Ontario advisors

Some ‘forex’ funds are smoke and mirrors, warn Ontario advisors

Some ‘forex’ funds are smoke and mirrors, warn Ontario advisors

Investors should keep their eyes peeled and wallets sealed to certain foreign exchange funds, warn some Ontario financial advisors.

This is in reaction to two separate forex-fraud incidents announced in the province over the last week.

“There’s so many alternative investments coming onto the market and some of these are going on in other countries that are not necessarily approved,” explains Victor Lamba, a consultant with the Investors Group in Toronto. “Investors don’t necessarily know that.”

Last Wednesday, police arrested a 50-year-old Toronto man, who allegedly defrauded his clients of more than $7 million in a foreign currency trading scheme between October 2009 and July 2013. According to police, Stephan Novak posed as a foreign-currency investor and convinced referral-based clients to invest in his pool of funds. Five people have come forward, but police believe there are more victims and have taken the investigation internationally.

Meanwhile, last Thursday the OSC warned investors of unregistered trading firms Youtrade Investments MA Ltd. and You Trade Holdings Limited (YoutradeFX) based out of the U.K. and Mauritius. The firms are accused of soliciting investors to open trading accounts to conduct electronic trades on foreign exchange markets and to invest in certificates for difference (CFDs). The same warning was issued by regulatory boards in the B.C. and Quebec back in 2011. (continued on Page 2.)


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