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September 24, 2002
NFA ADVISORY: Always verify funds or require checks to clear before allowing withdrawals
Recently, National Futures Association became aware of a fraudulent scheme involving forged or altered cashier's checks. Two individuals, one of whom appears to be a foreign national, opened futures trading accounts over the Internet with two FCMs and sent the FCMs forged cashier's checks, as initial deposits. The cashier's checks were from banks, which were located in states other than where the individuals resided. They were for large amounts and appeared to be authentic. Before the forged cashier's checks were rejected by the banks and returned to the FCMs, the individuals requested to withdraw funds from their trading accounts and have the withdrawn funds sent to locations in foreign countries.
NFA urges FCMs to verify cashier's checks and not allow withdrawals until checks have cleared or funds are verified.