Securities regulator warns investors about the risks
VANCOUVER, April 19 /CNW/ - In an investor watch released today, the
British Columbia Securities Commission (BCSC) is warning investors that
foreign exchange or FOREX trading - in which one nation's currency is traded
for another in hopes of profits from the differences in the exchange rate
between the two currencies - is a complex and volatile practice that requires
expert knowledge and experience to be successful.
"Foreign currency trading is not for inexperienced, everyday investors,"
said BCSC Executive Director Brenda Leong. "British Columbians who are
considering trading in this type of investment should be aware there are key
risks and pitfalls to consider that can help them avoid losing money."
Before investing in the FOREX market, be aware:
1. It is complex and volatile - it takes expert knowledge to track and
understand the many variables that affect currency exchange rates.
Without this knowledge, investors are likely to lose their money.
2. Trading on margin can increase losses - the more money borrowed to
invest in the FOREX market, the higher the risk of losing the
3. FOREX scams are on the rise - the promise of high returns with low
risk in the FOREX market is a red flag that the opportunity may be a
In addition, the BCSC wants investors to know that the seminars and
software programs they see advertised about how easy it is to get into foreign
currency trading cannot replace the need for research and expert knowledge. In
fact, investors should note that many of the products and services advertised
bear warnings about the risks of this type of investing and are careful to
cite the limitations of their product.
The BCSC's investor watch details how people can find a qualified person
to help them if they are interested in this type of investing. It also gives
investors red flags to watch for to avoid FOREX scams such as:
- Guaranteed high returns with little or no risks
- Promises or claims to be able to profit like experts
- Offshore investments that are tax free
Investors can find the BCSC investor watch at www.InvestRight.org.
The BCSC urges investors to call its Inquiries Group at 1-800-373-6393
about any suspicious investment opportunity to find out what they can do.
Investors can also report a suspected scam online by visiting
InvestRight is the BCSC's one-stop resource for investors to educate
themselves on how to make informed investment decisions. Its comprehensive
website at www.InvestRight.org provides a wide range of tools to help
investors develop critical thinking skills they need to protect themselves -
information such as how to do background checks, investment products, a scam
meter and video clips from victims of investment fraud. The BCSC's RED-FLAGS
communications campaign alerts investors to common sales pitches used by scam
artists along with a province wide seminar program. If you have questions or
problems with an investment or a financial adviser, please call 604-899-6854
or 1-800-373-6393 (toll-free in BC & Alberta).
The BCSC is the independent provincial government agency responsible for
regulating trading in securities within the province. If you have questions,
contact Andrew Poon, Media Relations, 604-899-6880.
For further information:
For further information: Andrew Poon, (604) 899-6880 or (B.C. & Alberta)