The Financial and Consumer Affairs Authority of Saskatchewan (FCAA) alerted the public about Foreign Exchange (Forex) scams targeting investors.聽
Forex investing includes speculating on the change in value of one currency against another.聽
This activity is legal and regulated in Saskatchewan, but only registered dealers are allowed to conduct the trades.聽
However, its complexity and volatility can be used by fraudsters to mislead unsuspecting investors into believing a scheme is a legitimate and lucrative investment.聽
Provincial and territorial securities regulators in Canada have seen an increase in Forex-related scams over the past few months.聽
Fraudsters have been using social media, online forums and buy and sell websites to target investors with promises of high returns from Forex investing.聽
鈥淵ou should always check to see if the person or company offering the investment is registered,鈥� FCAA Director of Enforcement Harvey White said.聽鈥淭he Canadian Securities Administrators鈥� National Registration Search () is a free tool that investors can use to check registrations as only registered dealers can sell Forex products,鈥� White added.聽
Forex trading is a volatile and a high-risk investment.聽If a potential investor can鈥檛 understand the risks, they shouldn鈥檛 get involved.聽
Red flags indicating the investment is fraudulent include a guarantee of little or no risk and high investment returns.
Further, unscrupulous dealers aren鈥檛 registered with the FCAA.
There鈥檚 an unwillingness to discuss the past performance or track record of the specialist traders who will handle their money.
Also, there鈥檚 a reluctance to identify specialist traders or traders located in offshore jurisdictions who are dealing with their cash investments.
Another red flag might include high-pressure sales techniques to buy Forex investments, purchase software, or take courses related to Forex trading.
Always check the registration of the person or company selling or advising about securities or derivatives. Visit The Canadian Securities Administrators鈥� National Registration Search (). 聽
Research the disciplinary history for the person or company, to discover if they鈥檝e broken regulatory rules in the past by using the Canadian Securities Administrators鈥� Cease Trade Orders database.
Investors should know what they are investing in and understand how the investment, product or service works.
Ensure to get a second opinion and seek professional advice about the investment.聽
If anyone has been contacted by someone offering a Forex investing opportunity, or any investment that may be fraudulent, contact the FCAA鈥檚 Securities Division at 306-787-5936.
For more information about scams and how to spot red flags visit聽.
