March 22, 2019, | AtoZ Markets – The Australian Federal Police (AFP) officers, together with officials from ASIC, have recently executed a search warrant on another possible Forex broker scam in Australia.
ForexCT case continues
Last week the Australian financial authority together with the AFP made a raid at the Melbourne ForexCT office. An online foreign currency broker was charged with harassment and pressure on its clients that made them lose hundreds of thousands of dollars.
Previously, by order of the Federal Court, ForexCT bank accounts were frozen and the director of the company, Shlomi Yoshay, was forbidden to leave the country.
ASIC did not comment on this raid, but the local media reported that several ForexCT employees were indicated in the order. Although this possible Forex broker scam in Australia owns an Australian financial services license, the company is wholly owned by Vanuatu. Two ForexCT clients have already claimed that the company’s employees had pressured them to invest hundreds of thousands of dollars in the company — money that was later lost.
Forex is still considered a risky business
The search in the ForexCT building began in the late afternoon and lasted until the early morning hours. Despite the fact that Forex trading in Australia is legal, ASIC recalled that this “requires a huge amount of knowledge, research and monitoring” because currency markets were highly unpredictable and could depend on many factors. Investors speculate whether a currency will rise or fall compared to another currency – this is called a pair.
Brokers such as ForexCT mediate between investors with a company that takes the opposite side of the contract. Earlier, the Australian media reported that ASIC had deprived its broker, Berndale Capital Securities, of a license for Australian financial services, and banned firm’s former director Stavro D’Amore from financial consultations for six years. D’Amor will appeal to the ASIC decision.
The forex broker affair victims share their experience
One of the victims of the possible Forex broker scam in Australia, Francisco Marquez, said that in April last year, a ForexCT representative contacted him. Despite his lack of experience in Forex trading, Marquez decided to invest $ 500 with the proposal that ForexCT would correspond to him.
Within a few weeks, the 73-year-old former installer, from Melbourne, got into a spiral of monetary manipulation and ultimately invested $ 270,000 of his pension in a brokerage firm. Marquez said he was bombarded by phone calls from ForexCT representatives, urging him to deposit more money. With the exception of a few small withdrawals, he lost everything.
Australian brokerage scam victim lost 120 000$ over one night
According to Marquez, when there were losses on his trading account, it was impossible to contact his ForexCT client manager by phone, but as soon as he tried to withdraw money, a representative would call him and convince him that he was doing well and that he should invest more. “Every time you call the office, the girl always answers the call and she always says:“ Just a second, I’ll see if there is anyone who can talk to you, ”and it was always the same:“ Oh, they at a meeting “or” they are at lunch, they will call you back. “No one called back. Never”.
Marquez’s daughter, Diana Marquez, told ABC that her father did not tell anyone what was happening to him until he lost $ 120,000 overnight. The Australian brokerage scam’s victim has already filed a complaint with the Australian Financial Complaints Office (AFCA), which is currently reviewing the case.
Certain ForexCT victims controversy
Another ForexCT client, Darrin Todd, also filed a complaint with the AFCA. His case was delayed for more than seven months, which caused anger and frustration. According to this Australian brokerage firm client, he lost about $ 450,000 because of deals with the firm.
AFCA found that ForexCT initially provided Todd with personal financial advice that violates the terms of the company license. Todd claimed that a ForexCT employee told him to pursue a strategy called ‘martingaling,’ which is essentially doubling-down on every loss until your luck turns around.
“I was advised to martingale, to close or hold my positions until they were in a winning status, and then I was enticed and asked to put more money in,” he said.
However, the AFCA indicated that, on the basis of several phone calls registered and transmitted by ForexCT, Todd did not follow the advice of the company, and therefore his losses could not be compensated.
ForexCT answers the allegations
In a statement regarding the requirements of both Todd and Marquez, ForexCT stated that it “considers the allegations in close cooperation with ASIC”.
“Our customers are always a key priority, and we are doing everything we can to keep a strict duty of care. We cannot comment on individual issues,” the statement reads.
“However, we have a dispute resolution procedure, and in case of anomalies, we provide compensation to our customers. We invite any customers who are unhappy with our service to contact us.”
Another Forex scam in Australia spotted
As it turned out, Todd was the victim of more than one Australian scam. He stated that he had lost 500,000 dollars, which he invested through another broker, Eightcap. As the victim explained, he did this after the price tape provided by the broker showed a sudden and significant drop in the price of the New Zealand dollar within a few minutes one day in October last year. Eightcap clients, who also lost hundreds of thousands of dollars, argued that the fall was simply a mistake in the broker’s quote and that it was not reflected in the official exchange rate or prices provided by other brokers. They also asked for their damages.
Eightcap denies its clients allegations
Eightcap strongly disputes this claim with the Australian Financial Complaints Authority. The firm claims, that they informed the customers that the sharp decline was a mistake but now said that the price was “correct and accurate” and that it was derived from the price provided by the “liquidity provider”.
In forex trading, a liquidity provider is an organization that, in any transaction, takes the opposite side to the investor, and the broker forms a “bridge” between the two parties. Liquidity provider of Eightcap is GO Markets. However, according to the local media GO Markets and Eightcap are part of the same corporate structure, headquartered in Singapore.
Todd and other investors are now running a case against Eightcap through AFCA. Eightcap did not provide any comments on this story.
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