NFA Investor Newsletter

2014 | 2013 | 2012 | 2011 | 2010 | 2009 | 2008 | 2007

 

NFA Investor Newsletter

April 10, 2007
In this Issue: Recent Action Against Forex Firm Chicago's Money Smart Week Learn from Fake Web sites

Recent enforcement action against forex firm underscores need for investor awareness

In March, both National Futures Association and the Commodity Futures Trading Commission (CFTC) took enforcement actions against Forefront Investments Corporation (also doing business as CFG Trader), a forex firm located in Richmond, Virginia. The actions were taken because Forefront failed to maintain minimum capital requirements and accurate books and records. As a result of the CFTC complaint, the U.S. District Court for the Eastern District of Virginia issued a preliminary injunction appointing a receiver to coordinate and manage all of Forefront's (and CFG Trader's) assets. Many investors whose accounts were being held at CFG Trader now must await the decision of the receiver before seeing any of their money.

Retail off-exchange forex trading carries a high level of risk and may not be suitable for all investors. The possibility exists that you could lose all of your initial investment and be liable for additional losses. It's essential that you know the risks involved before making any trading decisions.

For example, forex transactions are not traded on an exchange. Therefore, under the U.S. Bankruptcy Code, your funds may not receive the same protections as funds used to margin or guarantee exchange-traded futures and options contracts, which receive a priority in bankruptcy.

For more information on the risks of trading forex, read NFA's Forex Investor Alert and NFA's brochure, "Trading in the Off-Exchange Foreign Currency Market: What Investors Need to Know."


NFA to sponsor two events during Chicago's Money Smart WeekSM

NFA will present a seminar on how to avoid investment fraud and participate in a Financial Literacy and Education Fair as part of Chicago's Sixth Annual Money Smart Week, April 30 - May 5. Money Smart Week, sponsored by the Federal Reserve Bank of Chicago and its Money Smart partners, offers more than 300 free educational classes, seminars and activities that focus on financial topics for people of all walks of life.

NFA's program, "Don't Become a Victim of Investment Fraud," will be presented from 11:00 a.m. to 12:00 p.m. on Tuesday, May 1, at the Austin-Irving Branch of the Chicago Public Library. Attendees will learn how to tell a legitimate sales pitch from a fake one, as well as what questions to ask and actions to take to avoid becoming a victim of investment fraud. There is no charge to attend the program. For more information, contact Ruth Hong at (312) 781-1371.

NFA will also be one of several financial regulatory organizations participating in a Financial Literacy and Education Fair on Wednesday, May 2, from 10:00 a.m. to 2:00 p.m. at the State of Illinois Building Thompson Center, 100 W. Randolph Street in Chicago. These organizations will be distributing a variety of publications designed to educate and protect the investing public. For more information, contact the Illinois Secretary of State Securities Department at (800) 628-7937.

"Money Smart Week continues to provide many different opportunities for people to learn about managing their personal finances," said Chicago Fed President Michael Moskow. "This year's calendar features events for a broad range of consumers. During this week, attendees will have many chances to learn where good personal finance information is available."

The respective branches of the Federal Reserve Bank of Chicago also coordinates Money Smart Week programs in Indiana, Iowa, Michigan, Peoria and Wisconsin. For more information visit http://www.moneysmartweek.org.

Money Smart Week is an unregistered service mark of the Federal Reserve Bank of Chicago.

Investors can learn a lot from fake Web sites

Many fraudulent investment schemes are offered over the Internet on sophisticated, professional-looking Web sites. To help investors learn how to recognize and avoid these types of scams, the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) have produced phony Web sites that contain elements often found on fraudulent sites. For example, the sites claim guaranteed profits, big returns and no risk. If investors visit one of the sites and click on the button to invest, they are sent to a page that tells them they have been fooled.

The CFTC has six phony sites and the SEC has nine, including Growthventure.com, which claims to sell shares in Growth Venture Ltd., a "Fortune 500 construction materials supplier." These sites are excellent learning tools for investors.

In addition to phony investment Web sites, some swindlers have even gone so far as to develop phony regulatory Web sites to give investors the impression that the firm is legitimate because it is regulated by a government agency. Investors should always conduct their own independent research to verify the legitimacy of both the firm and the regulatory agency.

For additional information on phony investment and regulatory Web sites, visit the Investor Protection section of www.cftc.gov and the Investor Information section of www.sec.gov.


Recent Enforcement Actions

In the first quarter of 2007, NFA's Business Conduct Comittee issued Decisions, Member Responsibility Actions and Final Orders in Registration Cases against the following NFA Member firms and individuals. Click on the name for more detailed information.

Decisions in Disciplinary Cases
Affinity Trading LLC
David J. Aguirre
Robert F. Allen
George O. Allende
Angus Jackson Inc. of Florida
Barkley Financial Corporation
Donnetta L. Bass
Steven P. Becker
Ernie N. Blazeff
Janelle M. Breig
Steven J. Brewer
Brewer Futures Group, LLC
C4S & Co. LLC
Castle Trading, Inc.
CHP Asset Management LLC
Commodity Investment Group
Corporate Commodities, Inc
Jack E. Earnest
Robert L. Flickinger
Heriberto Franqui
Mitchell B. Goldberg
IG Financial Markets, Inc.
International Commodity Clearing
Iowa Commodities Ltd.
David R. Kocourek
Linda R. Kuhney
Mercer Capital Inc.
Mercer Capital Management
R. Kevin Monk
Summer L. Mote
Hingo Nagel
Optionvue Research, Inc.
Paul J. Paradis
Yuri Plyam
Private Asset Group LLC
Protrade Futures & Options
David J. Rodin
Stillwater Capital Partners LLC
Tradex Group LLC
Trading Alliance, Inc.
Velocity Futures, LP
Vladimir Konst Pereversev
Charles Warren
Frank M. Weathersby, III
John R. Wright
Steven I. Zander

Member Responsibility Actions
Cornerstone Capital Management LLC
Forefront Investments Corporation
Joseph T. Profit, Jr.
Renaissance Asset Management
William Stacy Wilkinson

Final Orders in Registration Cases
George J. Malfas


Links to NFA

NFA Investor Learning Center

Background Affiliation Status Information Center (BASIC)

File a Complaint

NFA's Website

Sign Up to receive the Investor Newsletter by Email.

Past Investor Newsletters

Let Us Know What You Think About This Newsletter

Send us an Email

Check Broker / Firm Information (BASIC)

You can check the registration status and disciplinary history of any futures firm or individual.

Begin Search

File a Complaint

You can file a complaint online. Be sure to include as much information as you can.

File a Complaint

Subscribe to Receive Free Investor Newsletter

Subscribe to receive NFA communications such as Notices to Members, press releases and Web updates via email.

 
NFA is the premier independent provider of efficient and innovative regulatory programs that safeguard the integrity of the derivatives markets.
Site Index | Contact NFA | News Center | FAQs | Career Opportunities | Industry Links | Home
© National Futures Association All Rights Reserved. | Disclaimer and Privacy Policy