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FPA Member Carol Day had what she thought was a great account manager. Her account with 4xMaster went from about $48,000 up to around $110,000. At this point, she was happy to pay a performance fee of just under $19,000.
Then something went terribly wrong. In 2 trading days, her account balance plunged to only about $14,000. No stop losses were used. Email requests to reduce leverage after the first day were ignored.
After this trading catastrophe, Carol attempted to contact the company to see if she could at least get her performance fee back. Just like the emails about reducing leverage, these were also ignored.
Finally, Carol complained to the FPA. Emails from both Carol and FPA Investigator Gerard were never replied to.
We are not yet ready to declare a managed accounts company to be a scam for failing to return performance fees after a huge loss. We would be tempted to declare them to be a scam for failing to even bother to speak with a trader about such an issue.
There are some issues that we do unanimously consider to be a scam in this case. Continuing to trade in an unsafe manner after the account owner asked for more caution is extremely unethical in our eyes. Having information still displayed on the company website a month after this incident declaring the maximum hypothetical intramonth drawdown is 20.4% is definitely not true advertising considering what happened to Carol's account. This makes us sincerely doubt the honesty of the performance table on the site claiming a 52.3% gain for that same month.
Under these circumstances, we feel there is no choice but to declare 4xMaster to be a scam and to blacklist that company.
Link to FPA Scam Finding
Then something went terribly wrong. In 2 trading days, her account balance plunged to only about $14,000. No stop losses were used. Email requests to reduce leverage after the first day were ignored.
After this trading catastrophe, Carol attempted to contact the company to see if she could at least get her performance fee back. Just like the emails about reducing leverage, these were also ignored.
Finally, Carol complained to the FPA. Emails from both Carol and FPA Investigator Gerard were never replied to.
We are not yet ready to declare a managed accounts company to be a scam for failing to return performance fees after a huge loss. We would be tempted to declare them to be a scam for failing to even bother to speak with a trader about such an issue.
There are some issues that we do unanimously consider to be a scam in this case. Continuing to trade in an unsafe manner after the account owner asked for more caution is extremely unethical in our eyes. Having information still displayed on the company website a month after this incident declaring the maximum hypothetical intramonth drawdown is 20.4% is definitely not true advertising considering what happened to Carol's account. This makes us sincerely doubt the honesty of the performance table on the site claiming a 52.3% gain for that same month.
Under these circumstances, we feel there is no choice but to declare 4xMaster to be a scam and to blacklist that company.
Link to FPA Scam Finding
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