BEWARE OF FOREIGN CURRENCY TRADING FRAUDS

• Have you been solicited to trade foreign currency contracts (also known as "forex")?

• If so, you need to know how to spot (forex) foreign currency trading frauds.  CFTC

(forex) The United States Commodity Futures Trading Commission (CFTC), the federal agency that regulates commodity futures and options markets in the United States, warns consumers to take special care to protect themselves from the various kinds of frauds being perpetrated in today's financial markets, including those involving so-called "foreign currency trading." (forex) CFTC

(forex) A new federal law, the Commodity Futures Modernization Act of 2000, makes clear that the CFTC has the jurisdiction and authority to investigate and take legal action to close down a wide assortment of unregulated forex firms offering or selling foreign currency futures (forex) and options contracts to the general public. In addition, the CFTC has jurisdiction to investigate and prosecute foreign currency fraud occurring in its registered firms and their affiliates. (forex) CFTC

The CFTC has witnessed the increasing numbers and growing complexity of financial investment opportunities in recent years, including a sharp rise in foreign currency trading scams. While much foreign currency trading is legitimate, various forms of foreign currency trading have been touted in recent years to defraud members of the public. (forex) CFTC

Currency trading scams often attract customers through advertisements in local newspapers, radio promotions or attractive Internet sites. These advertisements may tout high-return, low-risk investment opportunities in foreign currency trading, or even highly-paid currency-trading employment opportunities. The CFTC urges you to be skeptical when promoters of foreign currency trading claim that their services or account management will earn high profits with minimal risks, or that employment as a currency trader will make you wealthy quickly. (forex) CFTC

• Forex Scams
  Generally speaking, foreign currency futures and options contracts may be traded legally on an exchange or board of trade that has been approved by the CFTC. (forex)

• Forex Fraud
  Have you been solicited to trade foreign currency contracts (also known as "forex")?  (forex) CFTC

• Understanding Legitimate Foreign Currency Operations
  Generally speaking, foreign currency futures and options contracts may be traded legally on an exchange or board of trade that has been approved by the CFTC. (forex)

• Stay Away From Opportunities That Sound Too Good to Be True
  Get-rich-quick schemes, including those involving (forex) foreign currency trading, tend to be frauds. (forex) CFTC

• Avoid Any Company that Predicts or Guarantees Large Profits
  Be extremely wary of companies that guarantee profits, or that tout extremely high performance. In many cases, those claims are false. (forex)

• Stay Away From Companies That Promise Little or No Financial Risk
  Be suspicious of forex companies that downplay risks or state that written risk disclosure statements are routine formalities imposed by the government. (forex) CFTC

• Don't Trade on Margin Unless You Understand What It Means
  Margin trading can make you responsible for losses that greatly exceed the dollar amount you deposited. (forex) CFTC

• Question Firms That Claim To Trade in the "Interbank Market
  Be wary of forex firms that claim that you can or should trade in the "interbank market," or that they will do so on your behalf. CFTC

• Be Wary of Sending or Transferring Cash on the Internet, By Mail
  Be especially alert to the dangers of forex trading on-line; it is very easy to transfer funds on-line, but often can be impossible to get a refund. (forex) CFTC

• Currency Scams Often Target Members of Ethnic Minorities
  Some forex scams target potential customers in ethnic communities, particularly persons in the Russian, Chinese and Indian immigrant communities, through advertisements in ethnic newspapers and television "infomercials". (forex) CFTC

• Warning Signs Of Commodity "Come-Ons"
  If you are solicited by a forex company to purchase commodities, watch for the warning signs listed below: (forex) CFTC

• More Information and Contacts
  Questions concerning this advisory may be addressed to the CFTC's Office of Public Affairs at (202) 418-5080. (forex) CFTC

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