The Financial Markets Authority (FMA) has issued a warning to the public about Phoenix Forex Limited and the Oak FX foreign exchange trading system.
FMA believes that Phoenix Forex’s claims about the level of returns made by its trading system are untrue, and that Phoenix Forex is misrepresenting the profitability of, and risks associated with, its trading system. Investments promising unusually high returns are often not legitimate offers. FMA urges caution by anyone considering dealing with Phoenix Forex.
Phoenix Forex is providing access to a foreign exchange trading system. Under this system, the investor opens an account with a third party broker and the investor’s account is traded for the investor using algorithmic trading software. Phoenix Forex undertakes extensive advertising, as well as making unsolicited cold-calls to potential investors. FMA understands Phoenix Forex requires investors to pay a substantial up-front fee of up to $25,700 to subscribe for the system.
Phoenix Forex has previously advertised returns of between 50% to 65% per annum, and continues to promote the trading system as providing high returns. In FMA’s experience, it is highly unlikely that this kind of investment can deliver such high returns. Phoenix Forex has not been able to provide any evidence to support its claims of having achieved these returns. Further, investments of this nature carry a high risk of loss of some or all of an investor’s capital, and losses can exceed the amount of the original investment.
In addition, any person who is in the business of providing financial services must be registered on the Financial Service Provides Register. Further, a company which is in the business of dealing in futures contracts, including margin foreign exchange products, must be authorised by FMA. Phoenix Forex is not registered as a financial service provider, and has not been authorised or licensed by FMA for any service.
Prospective investors should check to confirm a person or company is registered, and do their own due diligence on that person or company, before engaging any financial service provider or paying any money in respect of a financial service or investment. Any investor who is unsure about a financial service provider or a financial product should seek independent financial advice from a registered or authorised financial adviser before making any investment.