GUILTY - Case# 2011-009 | monkata vs www.investtechfx.com

[now4dw]

My question is simple... why?

Why do traders continue to place their funds with obscure brokerages who do not even show a street address on their site? Surely the very essence of a good trading plan is due diligence. Am I capable of being a trader? How will I trade? With whom will I trade?????

I've just visited the InvesttechFX site. One of the first things I noticed is the following:

ATTENTION! INVESTTECHFX DOES NOT PROVIDE SERVICES FOR U.S CUSTOMERS. WE APOLOGIZE FOR ANY INCONVENIENCE.

My first response is 'Why?'. After all, the U.S. is a mega market for fx brokers. Common sense tells me that if they could (deal with U.S. customers), they would!

Doesn't that ring any alarm bells?

The next thing I noticed was that they were willing to give me up to a 30% bonus to move my money there. Have you ever hear the saying 'If it sounds too good to be true, it is'?

Does Gain offer that? How about FXCM? Or MBT? Interactive? GFT? No, no, no, no and no! Nor does any other well established, proven broker that I am aware of.

Do all of the above have a street address that they are happy to share online? YES!

I keep reading of one FX scam after another. I suggest to all of you that if you open your eyes and your mind before you open your wallets, we'll all be better off.

David Wilks

 

[MichelAnge21]

David

InvesttechFX accepted US clients for 3 years. You can see here plenty of US investors are trying to get their money back. InvesttechFX stopped accepting US customers only after january 26, 2011 when the CFTC filed a civil lawsuit against them in the New York southern district.

For the bonus, plenty of regulated brokers offer them and everybody knows they are just a joke. They are for trading purpose only and you cannot ever withdraw them unless you fulfill many conditions. I do agree that it was possible to check if Investtech was properly regulated by contacting the Ontario Securities Commission and/or the CFTC. There were other red flags also, but it requires some active research before you clearly see them like the non-existence of their `clearing house `GIB that they said was in England.

All in all, it doesn t help anybody to tell them that what happened is their own fault. The scam by Investtech was actually well done. They did not promise any irrealistic rate of return like Madoff did for many years and Madoff fooled even smart investors.

For 2 years, Investtech also maintained a pretty good reputation until their bag was full. People often rely on reviews by peers to chose their broker.

Another thing. The CFTC is certainly doing the right thing by going after unregulated brokers, but they now also put many limitations on perfectly regulated brokers. I heard for example that my present broker GoMarkets in Australia wont accept US clients with a net worth of less than a certain amount ( I saw one guy who says 10 millions: not sure if it s true ) because of the new limitations by the CFTC. Now, GoMarkets is perfectly legit. So what will happen is the perverse effect that some US traders will keep giving their money to unregulated brokers simply because those will accept them `no question asked `.