Foreign exchange fraud topic at white collar crime symposium09 December 2010
SAINT JOHN (CNB) – Foreign exchange fraud will be discussed by law enforcement and regulatory agencies at the fourth annual White Collar Crime Symposium in Saint John on Dec. 10. The symposium is hosted by the New Brunswick Securities Commission.
Foreign Exchange, also known as forex, is the speculative buying and selling of foreign currencies. In recent years, the number of entities providing forex trading products and services directly to consumers, particularly online, has grown significantly.
"Enabled by the internet and with the promise of high returns, forex trading is on the rise in Canada," said Jake van der Laan, director of enforcement with the commission. "Consumers should be aware that forex trading is still somewhat of a new frontier, particularly when dealing with entities in international locations with little or, in some cases, no regulatory controls."
At the symposium, van der Laan will make a presentation about forex trading including: how the market works, how fraudsters take advantage of the market, the red flags to watch out for and how investors may be approached.
Participants representing the RCMP, municipal law enforcement agencies, insurance and pension regulators, Revenue Canada and other provincial regulators, will also learn about skimming, hear examples of red flags from the commission’s compliance officer, get an update on civil forfeiture and review case examples of fraud prosecutions under the Securities Act.
"Sharing market intelligence and expertise among enforcement and regulatory agencies enables better co-operation and more effective action against those who break the law," said Rick Hancox, executive director of the New Brunswick Securities Commission.
The commission hosts the symposium annually as an opportunity for law enforcement and regulatory agencies to exchange information about recent developments in the investigation and prosecution of white collar crime.
More information about recognizing the signs of a fraudulent investment scheme and about informed investing can be found on the commission website.
As an independent provincial Crown corporation, the commission oversees the capital markets in New Brunswick and regulates those that sell or manage securities. Its mandate is to protect investors from unfair, improper or fraudulent practices, and to foster fair and efficient capital markets and confidence in capital markets. The commission is funded by regulatory fees paid by those operating in the investment industry including public companies, mutual funds and more than 7,000 registered individuals and firms.
Foreign exchange information
The foreign currency exchange (forex) market is a worldwide decentralized over-the-counter market for the buying and selling of currency. The bulk of forex trading is done between institutional trading partners (banks and other large financial institutions) on what is called the interbank market.
Individual (or retail) traders are unable to trade on the interbank market directly. As a result those with access to the interbank market have created secondary marketplaces for retail trading. This secondary market, although a relatively small part of the overall forex market, amounts to about $1 billion of trading activity each day. Retail forex is experiencing steady growth and is being increasingly considered as a speculative investment by retail consumers.
● The firm is not registered as an investment dealer.
● It is based in a poorly regulated jurisdiction.
● It has no operational history (Google search).
● There are unrealistic promises of return and/or guaranteed profits.
● There are statements that forex is low risk.
How investors can protect themselves:
● Verify the registration and bona fides of the entity.
● Perform a background check of the entity.
● Get everything in writing and review it carefully.
● Seek out professional advice from a lawyer or accountant.
● Never invest more than you can afford to lose.
● Never make a decision under pressure.
● Never mortgage your home or cash-in your savings.
● New Brunswick Securities Commission: www.nbsc-cvmnb.ca