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Two Traders, Two Companies, One Big Scam

Discussion in 'Scam Alerts' started by Scam Investigations Committee, Apr 24, 2009.

  1. Scam Investigations Committee

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    FPA member Yokebeto is part of a trading group from Japan that has been testing out an EA. FPA member Mr. Madruga is from Brazil and was doing his own trading not linked to Yokebeto's group. We've seen him on another forex forum before he joined the FPA.

    What the two of them have in common is that both were making a profit on accounts at Velocity4x, which is an IB for StartForex. Also, both were making money trading.

    In Yokebeto's case, he and his group got a note saying that the risk control department determined that all their profits (from a very large number of trades) were due to improper pricing. Their accounts were closed, all profits were confiscated, and their initial balances were returned. This happened to about 20 people in that group.

    Mr Madruga's attempt to withdraw money was met with silence for weeks. Finally, after involving the FPA, he got a single note from Velocity 4x stating that the withdrawal request was being forwarded to Start Forex for processing. Then he heard nothing more.

    Yokebeto's group and Mr. Madruga sent many emails to both Velocity4x and StartForex and CCed the FPA on those. FPA Investigator Gerard also sent a number of emails to both companies. Other than the one note Mr. Madruga got, there was no other reply.

    It is possible that Yokebeto's group might have violated some trading rule. If this is the case, they are owed a thorough and complete explanation, not a quick note telling them they lost 100% of their efforts and profits. Since neither Velocity4x nor StartForex would bother with an explanation, we have no choice but to believe that the traders are correct and the brokerages are improperly taking profits owed to the traders.

    In Mr. Madruga's case, we can think of no explanation other than outright theft, both of profits and his initial balance.

    Improperly taking money owed to traders is the FPA's first definition of Scam. In this case, both Velocity4x and StartForex have met that definition.

    Both Velocity4x and StartForex are now blacklisted by the Forex Peace Army. If you have an account with them, we urge you to withdraw your funds as quickly as possible. We also urge all traders to not place any money with these companies.



    Official scam finding against Velocity4x and StartForex

    Yokebeto's original complaint against Velocity4x
     
  2. Cojones

    Cojones Recruit

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    That's why I hang out here.

    I really like your style. Get them scammers!
     
  3. glozim

    glozim Recruit

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    Dont spare these thieves

    Only if these scammers realise what theyre doing our efforts and their rotten image if they have any in the first place . Be rewarded For your efforts.

    Regards
    Glozim
     
  4. yurps

    yurps Private, 1st Class

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    Too many scams

    I have decided there are just too many scams in forex. There are some good companies of course, and if anyone is trading forex they they should stick with the large well-regulated firms. However, it is the smaller firms were price inefficiencies take place which can be taken advantage of, or course after you make the money, they can just as soon take it away from you.

    Face it, forex is not what it was a few years ago. Back then you could get filled lots of places with the Secret News Weapon and make lots of money, but now the brokers have woken up. There are very free lunches, and as soon as you think you find one, it can be taken away from you.

    These days you have to learn to trade, plane and simple. Also the nature of the FX market has changed, large volitile sudden moves can take place. I have found the Futures market it be a much more honest world, there you can see the volume and all the buys and sells. You can see participants BUY 1000 S&P EMini contracts for $12.5k per tick. In forex, only the big banks can see the orders and who is buying or selling and how much. The odds are stacked against you. Futures is a more level playing field, and if you are still interested in currencies you can trade Currency Futures.

    Of course forex still has its place, but if you are not sure, safe yourself the hassle and go to a market that has a centralised exchange and there is 1 price for everyone.

    Of course FPA is great for reporting these scams to the forex community on the internet, but it won't get you your lost money back, and the company can always just change there name and come back.

    If you are just looking to take advantage of price discrepencies between fast and slow brokers, then good luck to you, ultimately the longevity of such an endeavour is limited, and the rug can be pulled from under your feet suddenly.
     
  5. rovercom

    rovercom Recruit

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    I will tell all my subscribers about the good work you are doing.

    Hi,

    I'm extremely pleased with the investigations that you are doing into roque brokerage companies. This will prevent many traders from falling into their dirty hands.

    To make sure that as many traders know what you are doing, I will inform my newsletter readers about your efforts, and tell them to join your site.

    Keep up the good work, and thanks for what you have done so far.

    Regards,

    Ronald Verwer.
    EA Tutorials and Tips newsleter.
    Newsletter Pre-Launch Page
     
  6. Cindy in AZ

    Cindy in AZ Recruit

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    nfa.org

    Thanks for watching out for us out here in Forex land... Just a reminder- any broker you are thinking about working with needs to be regulated by that countries regulatory agencies. A great place to start in the US is at nfa.org Stay safe out there.
     
  7. pcbg007

    pcbg007 Private, 1st Class

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    City Index has withrawn from U.S. NFA membership

    Anyone trading with the City Index group, be wary. In their 2009 updated website, they claimed that their group is regulated by U.S. NFA. However, when I checked after some nasty encounters with this broker, NFA informed me that City Index is no longer NFA regulated since Feb 2008!

    Why do they drop off NFA membership? What does this imply?

    Well, if any trader were to open accounts with them thinking that they are safe because they are NFA regulated, then any complaints to NFA of their scams will not be looked into by NFA anymore. So they are free to do anything withiout having to look back behind their shoulders since Feb 2008.

    If you are still trading with them, good luck.

    If anyone is interested to know the full details of how they scammed me and some other traders, I have a very interesting and complete report that I can send you to read.

    Best regards to all here!

    pcbg007
     
  8. AlanN

    AlanN Recruit

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    City Index, also, own Finspreads which gives a new meaning to the word "rip-off". I closed my account with them after their trading platform went down and nobody picked up the phone on their dealing desk. I've have several spread betting accounts and the only one which I have had no issues with is IG Index. I've had an account with them for 10 years and can't remember ever having cause to complain. Certainly not in the last 3 years anyway.
     
  9. Steve1001

    Steve1001 Recruit

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    Thank You

    I really appreciate your exposing these brokers as well as the others you have exposed

    You guys have a great site and do a great service for all of us.

    Thanks!
     
  10. elton-farr

    elton-farr Recruit

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    I'm intersted to read of these problems with dodgy fx companies - i've traded with CMC for a year, and had no problems - why do people use these small bucket shops rather than a set up with physical address's etc, what is the initial attraction?
     

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