We’ve all heard about fake brokers and forex scams from time to time, but is there such thing as a fake regulatory agency? And should you be worried?
If you’ve paid attention in our School of Pipsology lesson on Forex Trading Scams, then you should be able to quickly identify which among these institutions isn’t a real regulatory agency:
- Commodity Futures and Trading Commission
- Financial Conduct Authority
- Australian Securities and Investments Commission
- European Commodities Commission
- Swiss Federal Department of Finance
- National Futures Association
- Prudential Regulation Authority
Ain’t as easy as it looks, huh?
If you’ve answered “European Commodities Commission” then give yourself a pat on the back! Just recently, the Financial Services and Monetary Authority (FSMA) exposed the existence of a fraudulent firm named European Commodities Commission (ECC), which is posing in goody two shoes as a regulatory agency. According to its company page, this so-called supervisory authority is based in Belgium and claims to be a watchdog for securities dealers and other financial institutions offering offshore investment services.
In particular, the European Commodities Commission says that they provide verification of investment services and even assists in arbitration if necessary. However, the FSMA indicated in its press statement that the ECC is improperly representing itself as a financial regulatory agency and that it appears to be used as a front in giving the impression of trustworthiness for potentially fraudulent operations.
Come to think of it, regular folks could be easily lured into forking over their hard-earned cash to a fake broker or a forex scammer that claims to be accredited by the ECC. Regulated by the European Commodities Commission? Seems legit!
Luckily for you, the real good guys out there were able to see right through this fabrication and warn the public about it. It seems that fraudsters are getting more and more creative these days, as they’ve levelled up and invented a seemingly credible supervisory agency in order to promote certain investment services. This means that, even with financial watchdogs already on the lookout, traders like you and I should also step up our game in being vigilant for potential scams. As the FX-men always say, “If something sounds way too good to be true, nine and a half times out of ten… It’s a scam!”