Foreign Exchange Currency Trading Frauds - Advisory Warning No. 9 of 2009

Summary

This is a public advisory issued by the BVI Financial Services Commission under Section 4(1)(l) of the Financial Services Commission Act, 2001, warning investors and the general public about foreign exchange (forex) currency trading frauds. It explains how legitimate forex trading works and describes common characteristics of forex investment scams targeting retail customers.

• Common warning signs highlighted: Promises that sound too good to be true, claims that most customers profit, unsolicited cold calls, fabricated success stories, high pressure demands for immediate cash transfers, promises of minimal or fixed risk/return, promises to recover losses, and difficulty obtaining background information on the firm.
• Public guidance given: Investors are urged not to invest more than they can afford to lose, to understand the risks and procedures involved, and to verify that anyone offering a forex investment is properly licensed with a reputable business history.
• Regulatory position stated: The FSC states that firms which fail to disclose the risks involved, or misrepresent them to clients, would be engaging in illegal schemes.

The advisory does not create licensing, filing, or compliance obligations for regulated entities; it is an informational public warning aimed primarily at investors and consumers, though it implicitly puts unlicensed forex operators on notice.

Applies to

members of the public, retail investors, unlicensed foreign exchange currency trading firms