NFA Finds Africa, Texas Nexus for FIN FX
by Paul Springer
Anyone can put up an investment website claiming outsized returns. But many of these websites are fronts for unscrupulous individuals who have potent reasons for remaining anonymous.
The National Futures Association said in a regulatory action that it found evidence of deceptive communication on the website of Carrolton, Texas-based commodities advisor FIN FX LLC. Then it learned of a shadow principal in addition to the registered principal. Both were allegedly evasive in dealing with the NFA, the agency claimed, and the pair may have moved back to South Africa – where they had already been in trouble with regulators once before.
An individual who was skeptical about claims on the FIN FX website contacted the NFA, which immediately used Google to visit the site. A variety of trading programs offered annual returns as high as 116%, and an individual in a mini-forex trading contest purportedly had achieved a 354% return.
Mini-forex accounts are like the malt liquor of retail investing – they’re seemingly cheap, initially pleasing, and likely to cause the mother of all financial hangovers.
When the NFA started asking questions, the FIN FX principal said that the trading programs and contest had actually been offered by an unrelated trading firm, so FIN FX was claiming huge returns for programs it had nothing to do with.
Further inquiries indicated that the principal did not live in the Texas address he claimed. And a visit to the company itself led to an aviation support business owned by a second South African person.
Subsequent telephone conversations with the two individuals – who spoke to each other in a language unfamiliar to the investigators – confirmed that in 2005 the High Court of South Africa had accused the pair of soliciting $12.5 million for two entities known as Webforex, the NFA said in the action. The two allegedly squandered the millions and did not provide the NFA with evidence to back up claims that the charges had been dropped.
The NFA obtained emergency authority to shut down FIN FX and prohibit the transfer of funds on its books.
If the NFA’s allegations prove true, the two individuals engaged in quite the globe-trotting lifestyle, leaving South Africa for Texas to avoid regulators on one continent, and then reprising the move to dodge the NFA.
Sadly, the alleged fraudsters appear to have avoided serious consequences on both continents. And racked up some serious frequent-flyer miles in the process.
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