Forex Blog: Currency Trading News & Analysis.

July 27th 2005

Forex markets witness rising fraud

A surging interest in currency trading has been accompanied by a host of new brokerages and institutions offering forex trading accounts, information, and advice. Unfortunately, many of these institutions appear to be little more than fly-by-night operations, defrauding investors and reaping huge profits through Ponzi schemes and other scams. Since 2000, 23,000 investors have collectively lost about $350 million to fraudulent brokerages. Hundreds of new fraud cases are now reported every week, due to a near absence of regulation. While the Commodity Futures Trading Commission is technically charged with regulating forex derivatives markets, it has been unable to leverage its authority into regulating spot transactions, and scammers are thriving. The Wall Street Journal reports:

The slim supervision is attractive to scammers, many of whom claim they can help customers cash in on the dollar’s fluctuations. By avoiding dealings on the Chicago Mercantile Exchange and other established futures and options arenas, fraudsters can evade the CFTC’s reach.

Read More: Scammers Operating on Periphery Of CFTC’s Domain Lure Little Guy With Fantastic Promises of Profits

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Posted by Adam Kritzer | in Investing & Trading | No Comments »

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© 2004 - 2024 Forex Currency charts © their sources. While we aim to analyze and try to forceast the forex markets, none of what we publish should be taken as personalized investment advice. Forex exchange rates depend on many factors like monetary policy, currency inflation, and geo-political risks that may not be forseen. Forex trading & investing involves a significant risk of loss.