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HSSNA.com: Forex scam that destroys managed forex accounts, milked for commissions

Discussion in 'Scam Alerts' started by Trader B, Oct 14, 2008.

  1. Trader B

    Trader B Private

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    HSNNA.com: Forex scam that destroys managed forex accounts, milked for commissions

    In an nutshell: Scam.

    For evaluation of this system I reviewed several reports of live accounts and I asked the account manager a number of questions.

    Demo accounts shown at websites and in emails were not representative of real performance. Live accounts did not grow as much as shown in demos and advertising materials, even during best times, and live accounts crashed regularly. When crashes ocurred, the account managers were actively hiding this information by advertising with new demo accounts that were started after the crashes.

    There was false advertising saying that the only payment is 50% of the high water mark. In reality, they avoid the usual format of managed accounts that deduct regular payments for performance fees. The managers act as Introducing Brokers and actually raise their own commission by raising the spread by one pip.

    When asked, they said that their system is not suitable for the format of regular managed accounts, and that the broker needed to be paid one pip more for allowing them to trade their 'scalping system' (it is not a scalping system). The broker, however, responded with the information that the account could be set up as a regular managed account and that the 1-pip increase in spread was in fact the payment to the account managers for their services.

    Looking at the statements it became obvious that they used a grid system with massive trading volumes of usually more than a full lot per day. This equates to hundreds of dollars per week in commission even for smaller account sizes (over 10% of the account equity in commissions per month).

    Thus the scam is that the managers make money by trading volume and not by performance. They still made money while the accounts became seriously depleted or were destroyed entirely, by overtrading or the lack of a viable system. Their main interest appeared in hiding the fact that crashes occur often and in having customers stay on a little longer - because every day of positive or negative trading made profits for them.

    Risk protection was non-existent. The managers initially gave the guarantee to close all positions when 50% of the initial account size was reached to limit the maximum loss. This did not happen, several accounts were destroyed entirely.

    Money management was not existent. The statements showed that lot size was fixed even in decimated accounts, most likely because the managers were too greedy to take less than their maximum commissions even when accounts were being put at risk. At some point they went as far as doubling the lot sizes and risk, without contacting customers about the dangers.

    Thus accounts were damaged or destroyed by overtrading and increased spread to maximize their commission, as well as a lack of a consistent and viable system. Best strategy would be closing an account with them even at a loss, as long as any money is left there to be saved.

    Answers to questions were evasive or not forthcoming, and several false statements were made. A reply by Jason Drenston was that he had no time dealing with the issues because he was too busy saving other accounts.

    Conclusion: Unethical, unprofessional, dangerous.

    Names and websites associated with this scam:

    www.hsnna.com, www.hsnna.org
    Jason Drenston
    Yves Theunissen
    Stanley Stamos
    ANSA bgb N.V., Doorgangsweg 13, 3920 Lommel, Belgium, BTW: BE 460-578-269, Traderegistration: HRH 108199

    Derrek May
    Results of my managed account


    Example, on their increasing spread:

    FAQ on Website: 'Is the performance fee based on new high-watermark realised profits earned? Yes. Do you only charge the performance fee? Yes.'

    From ANSA: 'We are aware of this, the technic we use is compared by the brokers as a scalpingtechnic. This is acceptable for them, only when the market is low liquid then they loose money on positions traded like that.
    To compensate that they increase the spread. (...) The whole system can only work when every party involved is satisfied, the investor, the traders and the broker. I think everything is in reasonable proportions devided on this way.'

    From MIG: 'Ansa is charging an additional pip because of the service that they are providing you.'
     

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    #1 Trader B, Oct 14, 2008
    Lasted edited by : Nov 3, 2008
  2. Pharaoh

    Pharaoh Colonel

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    It's even better/worse than you think. It sounds like IBs with that brokerage have the option of adding 1 pip to spread. This means that the IB is probably getting a little bit of the basic spread and can choose if they want to milk clients for that extra pip. This means they were getting the basic IB commission PLUS an extra pip on each of your trades.

    Is HSSNA registered with some sort of regulators? If so, that's a good place to start the complaint. They might not do anything about adding to the spread and churning the account, but would probably find violating trade agreements to be very interesting.
     
  3. Trader B

    Trader B Private

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    Yes, I totally agree with you. That extra pip mostly went into the pockets of the IB, I checked with the broker.

    This double-dipping of trying to get both a percentage of profits AND increase the spread is not only extremely greedy, it also puts the account at risk. It was a grid system and compared to their demo account, the growth was much slower, presumably because of the increased spread.

    This is like putting a lead belt on a swimmer that is already struggling to keep afloat. It shows they awere after commmissions while they last and not after increasing the account. Totally unethical and unacceptable.

    No, as far as I know they are only registered as a company but not licensed.
     
  4. Thiago Ribeiro

    Thiago Ribeiro Recruit

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    So Have I

    I also have lost money with them. Everything you said is true.


    Is there something that we can do together against ANSA Company??? It must have a way to claim...

    My personal e-mail is thiagoribeiro1 (at gmail.com)...

    Regards,
    Thiago Ribeiro
     
  5. Trader B

    Trader B Private

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    Hi Thiago,

    Sorry to hear that. There is not much you can do legally. If you had a very large account, it may be worth your expenses taking them to court for fraud. This is very expensive and I am sure they know that usually no one will come after them.

    I have been trying to find out exactly how much they made in commissions. While you agree to trading risks and losing money, it would be fair if they returned their commission for this scammy piece of work. But if they were fair we wouldn't have these problems in first place.

    With the drop in CHFJPY they have likely destroyed all of their clients' accounts by now, and have not much of an interest in protecting of what is left of their reputation.

    I informed MIG about this scam, and they are not willing to disclose the commissions paid (they say it is Swiss Banking Laws - which in fact protects client accounts not bankers commissions). I am still in contact with them so that at least these guys can't be an IB with MIG again - but it seems that brokers don't care who is a scammer as long as they make money. They say it is not their responsibility. Unless you can show them a court judgement or something official that confirms an IB is a crook they are likely legally not obliged to do anything. Will hurt the broker's reputation though.

    I encourage you to report things to your broker. Perhaps these fraud artists will be stopped at some point.
     
    #5 Trader B, Oct 23, 2008
    Last edited: Oct 23, 2008
  6. switch

    switch Recruit

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    I too had an account with them that they destroyed in a blink of the eye.
    The account grew steadily, and I paid them their 50% but when the market went against them they didn't stop or close the trades and my account disappeared over a few days.

    I used them through Alpari in the UK, is there anything I can/should do?

    Thank you

    Simon

     
  7. Pharaoh

    Pharaoh Colonel

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    hsnna.com and hsnna.org don't seem to be working. It's possible that your scammers have already run away and plan to set up shop somewhere else.
     
  8. Trader B

    Trader B Private

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    Yes, their website is down. I guess it became too difficult to uphold appearances, or someone may have been able to prevent them from making blatantly false statements in public.

    But this Derrek May guy is still active on his blog, and is drawing in more victims:

    my-robottrader.blogspot.com

    There is no verifiable data on there - i guess easier to scam people that way.
     
    #8 Trader B, Nov 15, 2008
    Last edited: Nov 15, 2008
  9. meo

    meo Recruit

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    I had an account managed by them also.

    Starting in the beginning of the year, I was up more then 1 000 % in august (after fees).

    In May I took out my initial deposit of 10 000 $ and in June I withdraw another 10 000 $.

    So my investment doubled, but what I left in the account went down the drain.
    Ofcourse I have pitty now that I didn't withdrew more in August.

    In september many other moneymanagers (other then hsnna) blew my accounts, but I don't call them scammers.
    In normal market conditions they performed well, but most of them didn't forsee the whole financial crisis.

    Forexinvestments are always risky, I think at the moment even too risky.
    I prefer to stay at the sidelines now.
     
  10. Trader B

    Trader B Private

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    Hello meo,

    Well well, aren't you lucky - not only did you sign up in the very beginning exactly when their advertising started, but you also knew when to take out your money just before the crash in May and then again just before the crash in June! Well, done...

    Unfortunately everybody else simply seems to have lost their entire investments.

    Or what is also possible: perhaps your account is not real, and you are one of the scammers trying to defend this fraudulous scheme? My real account never grew as much as the demo account and could never have doubled.

    And you know 'many' managed accounts that also blew up during the market melt-down? I have two responses:

    (1) The HSNNA accounts had serious crashes that we could trace back at least to May and March - this has nothing to do with extreme market conditions in late summer.

    (2) And no - I actually don't know of any reputable managed account firms that destroyed all accounts of their clients. Losses are normal in Forex - but not the mismanagement and destruction of whole accounts in such a manner.

    And yes - I call these people scammers for the reasons listed in my posts above: Deceiving statements about performance, false statements about commissions, jeopardizing client accounts for getting higher commissions, lying about supposed equity stop loss of 50% in account management that were not put in place, not responding to concerns by clients regarding increased risk to irresponsible levels that finally wiped out accounts, and more of such unprofessional and unethical behaviour.

    Now I can also add that the account managers did not respond to complaints, and have taken the website with their obviously false advertising off the net, and cannot be reached anymore. Meanwhile this Derrek May (or whatever his real name may be) is still reporting his account as growing on his blog without any of the crashes that happened, and he is likely luring in further vicitims.

    While I am trying to recover some of the money lost, which could be refunded from the insane commissions these scammers collected under the table from the broker, my effort here is mostly a warning to new people tempted to sign up in this fraudulous scheme. I wished I had been warned before I signed up - but there was nothing on the internet then.

    I recommend to read posts carefully and form your own opinion.
     
    #10 Trader B, Nov 28, 2008
    Last edited: Nov 28, 2008

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