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FOREX Scams and
Frauds
The foreign exchange
markets are sometimes referred to as "forex." The forex
market is the largest financial market in the world,
with daily average trading turnover of approximately
$1.5 trillion. Operating 24 hours a day, the forex
market is highly liquid and most of the trading is
conducted electronically or over the phone. Banks,
insurance companies, large corporations and other large
financial institutions all use the forex markets to
manage the risks associated with fluctuations in
currency rates. In recent years, retail investors have
also looked to the forex markets as yet another possible
investment opportunity.The Commodity Futures Trading
Commission cautions investors to be wary of websites
that purport to offer high yield investment
opportunities in forex transactions, because this is a
common area of internet fraud. The CFTC has posted
several fictitious websites that are representative of
typical websites that have been the subject of CFTC
enforcement actions.
Examples of fraudulent websites include the
following:
Foreign currency futures contracts may be
legitimately traded either on a recognized futures
exchange or in the "interbank market," which generally
involves trading between large institutions such as
banks and corporations. The interbank market does not
typically include individual or retail customers.
Fraudulent currency trading firms often tell
customers that their trading is done in the "interbank
market." Be wary of any firm that claims that you can or
should trade in the "interbank market" or that it can or
will do so on your behalf. Your losses can be very large
in a single day. Companies that tell you otherwise may
well be engaged in illegal schemes.
Also: The
10 Warning Signs of FOREX fraud
Forex online. Without it, you are wasting your time (and money).
Forex trading involves substantial risk of loss, and may not be suitable for
everyone.
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