The Commission Warns Investors on Forex Currency Trading Frauds

The BVI FSC has issued an advisory warning to investors to beware them of Foreign Exchange Currency Trading Frauds. The warning issued under Section 4 (1) (1) of the Financial Services Commission Act, 2001, informs the public that the entities professing to offer high yield and low risk investment opportunities from investments in foreign currency contracts “are normally scams”. In the opinion of the Commission, these entities may look like a new sophisticated form of investment opportunities, but in reality these are financial frauds “especially perpetrated on retail customers”.

The Commission explains that Forex scams may be widely advertised, and the customers are told that they will obtain tens of thousands of dollars in a few weeks or months. After the currency trading firms tell the customers that they can or should trade in the interbank market, or that they will do so on their behalf, customers' money is diverted or simply stolen.

It is noted in the document that the interbank market does not usually include individual or retail customers, and the claims on the possibility of trading in this market should therefore be treated with extreme caution. The public is asked to note a number of warning signs that can point at foreign exchange scam, and not to invest in them.

The BVI FSC warns that if the companies do not inform customers on the risks involved, or even mislead them, then they would be involved in illegal schemes.