Does poor government oversight of Financial Markets in New Zealand make it a country to avoid?

Leofitz

Private
Messages
16
FPA members have been posting their problems with receiving account withdrawals from Capital Trade Markets on a couple other threads in this forum. This thread is place where all members who have had fraudulent dealings with New Zealand based brokesr can post their experience. The purpose will be to decide whether the financial oversight by legal agencies of the New Zealand government are rigorous enough to protect Forex traders.

The poor business practices seen by the FX brokers Forex Trends, and more recently Capital Trust Markets, begs the question. The conclusion may be to simply avoid all New Zealand based brokers. This would be until the government sets up a legal framework that discourages FX brokers from preying upon traders who do business there assuming there is rule of law that prevents fraudulent behavior.

In my recent investigation of CTM for the purpose of receiving back my deposited funds, I've communicated with an investigative journalist at Finance Magnates magazine in Aukland. He mentioned that other CTM clients had contacted him with similar stories and that he was investigating the situation. The journalist is part of a financial watchdog group that is concerned that there is inadequate protection of clients who do business with brokers registered in New Zealand. He sited a recent case with a broker "ForexTrends" that has been censured in NZ. He said that their fraudulent methods sounded similar to current reports about CTM. After he's collected enough information he plans to print an expose article that will highlight Mr. Reza Mokhtarian's exploits with CTM in New Zealand.

I'm not a legal expert but it seems to me that NZ is encouraging fraudulent behavior when they allow off-shore brokers to locally register a company, collect clients funds, deposit the funds outside the country, and then de-register their legal association with the primary financial oversight agency in the country and disappear. If a brokerage de-registers their company, all funds held in trust for clients should instantly be frozen, and all records seized.

In retrospect, a warning light for me should have been when CTM asked me to wire account funds to an account in Canada, rather than in New Zealand. I will never again open an account with a broker that holds client funds in another country.

The current situation with CTM and apparent indifference by the NZ agencies responsible to protect clients, is curious. A few months ago I had another NZ-based account closed when the Swiss Natl Bank un-linked the CHF with Euro. My account was with Excel Broker/Global Markets and they lost significant funds such that they closed down the company. I'd have to say that I was very impressed with Excell/Global Markets professionalism. They immediately began an email campaign of updating all clients every other day as to the ramifications of them losing substantial funds. They reassured clients that funds would be returned ASAP, and they were within 10 days.
An article was posted at their closure that seems to suggest that the NZ government was involved.

As of Thursday, 22 Jan 2015 100% of pending withdrawal requests were processed amounting to 93% of the $1.954M in client equity held by Global Brokers NZ Ltd (GBL). As of today, 27 Jan 2015, 96% of client funds have been sent back to clients and the remainder await withdrawal requests. The Financial Markets Authority of New Zealand has worked closely with GBL since the incident to ensure client funds were being safely returned.

The current CTM scenario unfortunately is the opposite. The CTM website has been up and down. No email communication after one initial message. obscure statements on their website about 're-organization and trust us'. Then long silence with all company representatives being inaccessible by phone or email. The icing on the cake was when they de-registered with the FSPR without any apparent response by the FMA or other agencies in the NZ government.!!!

Something stinks here and it may take media expose and a class-action suit to illuminate to the NZ government that their indifference to fraud isn't acceptable. FX traders have a world of choices as to where they take their business.

Please add your anecdotes and opinions related to doing business with an FX broker in New Zealand......
 

Pharaoh

Colonel
Messages
19,782
Evidently, all a broker has to do to escape NZ regulation is to dereister. At that point the NZ government seems to consider the issue to be someone else's problem.

Let's hope enough people complaint to the NZ serious fraud office and the various authorities in Canada (and elsewhere) to make Reza Mohktarian take responsibility for what he owes clients.
 

Kerobokan

Banned for uncivilized conduct
Messages
138
You must understand that setting up offshore tax protection vehicles or entities in these jurisdictions the standard practice is to hold the banking in another jurisdiction,to make any collection or tax liability much more difficult to enforce cross border.
Also it is extremely difficult to set up offshore banking to take third party client funds for investment,so these companies will have the bank accounts set up for different purposes.It is possible to get them shut down by communicating to the banks your funds go to that it is taking third party funds for investment,most offshore banks are very averse to this and will close or freeze the account until they are satisfied this isn't the case.
It is highly doubtful that Reza Moktharian has corporate banking specifically set up for these purposes in Canada as they have some of the strictest controls and regulations on this in the world,I would say virtually impossible for him to be operating these bank accounts.To close him down target these banks he's using in Canada,try to call the bank manager or area manager who's control this are these banks are under and tell them exactly what his operation is set up to do,you should find out his accounts are frozen and closed very,very quickly once they discover the truth!
 

vgasper

Sergeant
Messages
137
UMO FX is one of that brokers and NZ regulators cannot do nothing:

http://www.forexpeacearmy.com/forex-forum/scam-alerts-folder/40011-umo-fx.html?highlight=umofx

THE NZ SERVICES ANSWERS:

1. FSPR
"Good morning

Thank you for your email to the FSPR Information Service.

I recommend contacting the Financial Markets Authority as they are one of the government regulators of financial market operators in New Zealand.

They have an online complaint form here.

If you have any further questions do not hesitate to contact us again or call us on 0508 377 746. Our Client Service Centre Advisors are available Monday to Thursday 8.30am to 5pm NZT, for training purposes, our open hours on a Friday are 9am - 5pm NZT. International callers please phone +64 3 962 6162.

Regards

Grant McIntosh
Lead Advisor, Financial Service Providers Register

Service Centre (Southern)
Ministry of Business, Innovation & Employment
Hikina Whakatutuki - Lifting to Make Successful

Freephone: 0508 377 746 | International: +64 3 962 6162

Feedback on our service? Fill in our customer satisfaction survey."

2. FMA:
"Dear G_____

Thank you for contacting the Financial Markets Authority (FMA) with regards to UMOFX.

We understand that you are having trouble obtaining access to money held on your account with this company.

The company is not authorised or licensed by the FMA and we are not able to assist in the recovery of your money in any event.
As this entity is no longer part of a Disputes Resolution Scheme you will need to seek legal advice about what other action is available to you.

Please note that the director’s details for this company are available on the Companies Office website:

View All Details.

Kind regards

Pip Davidson"

3.FDRS:
"Dear G_____,

Thank you for contacting FDRS.

I must advise that membership for UMOFX of the FDRS was terminated on 17 April following notification of deregistration from the Financial Service Provider Register (FSPR). It appears that the company were deregistered following a request by the Financial Markets Authority (FMA).

This means that FDRS would be unable to assist with complaints about events that occurred after this date.

If you have concerns that this provider is trading in New Zealand you may wish to contact the FMA via https://www.fma.govt.nz/

I am sorry not to offer better news.

Regards


Richard Hazelwood
Facilitator

T: 0508 337 337
www.fdrs.org.nz"

So UMO fx is one in the line of NZ brokers!!!
 
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