Outlandish Claims

We have all seen the advertisements for Forex software that promises huge returns with little or no risk. Never mind the fact that Forex trading requires a lot of education, discipline, and plain old hard work. As Forex trading becomes more popular Forex scams are becoming more common. Beginning Forex traders are often seen as easy marks by scammers due to the fact that the Forex market is not regulated and is international in scope.

North American Securities Administrators Association Warning

The Forex market has been plagued by swindlers who prey on the gullible and the greedy. According to the North American Securities Administrators Association, “In a typical case, investors may be promised tens of thousands of dollars in profits in just a few weeks or months, with an initial investment of only $5,000. Often, the investor’s money is never actually placed in the market through a legitimate dealer, but simply diverted – stolen – for the personal benefit of the con artists.”

Fake Websites

Potential Forex Traders should be aware that anyone can register a domain name and set up a legitimate looking website for only a few dollars a month. Many of these websites have a professional appearance and typically promise huge returns with no mention of possible losses in Forex markets. Forex markets are like any other market and involve both gains and losses.

Many scammers hawk software that promises miracles. A quick Google search will turn up thousands of others making the same claims. Often these scammers are selling software that can be found on the internet for free. A thorough investigation of Forex software is time well spent.

The Case of Russell Warren Brent Cline

Russell Warren Brent Cline is a typical Forex scammer. A former house painter, he set up Orion International in Portland Oregon in 1998. He promised returns anywhere from 60% to 200% with very little risk, because of his sophisticated trading techniques. In 2002 he told investors that he had lost their money due to poor trades (he was a house painter, remember?) and ‘typographical’

errors. It is estimated that 600 investors lost $27 million. Most of the money was spent on luxury cars, private jets, real estate, boats, and an astounding $12,000 for pornography. Cline is currently serving his sentence in a Federal prison.

Investigation is the Key

Forex scams are common and potential Forex traders should investigate any and all offers through the CFTC (Commodity Futures Trading Commission) which has just set up a special task force to deal with growing foreign exchange fraud. A legitimate company will be registered with the CFTC or will be a member of the National Futures Association. Forex trading can be extremely rewarding and many Forex traders achieve great success in currency markets. Use common sense and check out the Forex trader you will be doing business with and get in there and trade!