Once again, the topic of risky investment opportunities comes up. Finanzas Forex is a private company, based in Panama, trading on the Foreign Exchange market, which recently opened itself to the unregulated retail market.
So far there is no formal review on Finanzas Forex, so i’m pretty much flying blind, picking up information as I get it. Hopefully by next week i’ll have more info from a conference they are having in Brazil.
FFX (Finanzas Forex) offers different investment plans, in varying risk levels… depending on how much money you invest, the maximum ROI (Return on Investment) changes.
From 100 to 3,999 dollars, the maximum you can earn is 10 percent MONTHLY.
From 4000 to 19,999 dollars, the max is 14%
From 20,000 to 49,999 dollars, it’s 16%
Fifty grand and up, it’s 20% maximum return per month.
There’s also a High Risk plan, that offers up to 50% return per month.
You have to keep your original investment with FFX for 6 months to avoid paying a 15% penalty. However, the gains you make are completely liquid.
There is a commission that can be gained by bringing another person into forex: .05% of that person’s investment per month. The commission structure is multi-level.
Going against conventional wisdom, I decided to become an investor. I’m going to watch this one closely.
The National Futures Association warns about Forex markets, saying:
As mentioned above, 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. Therefore, you should not invest money that you cannot afford to lose. Be aware of all the risks associated with forex trading and make an informed decision after consulting with your financial advisor and considering your own financial situation and objectives.
The Netherlands Authority for Financial Markets had this to say about FFX (or Evolution Market Groups, Inc– the company it’s under):
According to information disclosed by staff linked to the company, on 15th March 2008, the number of clients recruited by the company in the countries where the company performs business activity has added up to 18,720 clients and the amount collected up to 121,154,519 $. The company presents an increase of 600 clients and 2 million $ a day.
The report continued, essentially warning consumers about the company.
The Comision Nacional de Valores de Panama (Securities Commission of Panama) issued a clarification about FFX, possibly due to the number of inquiries made about the company:
La Comisión Nacional de Valores (en adelante la CNV) aclara al público que en esta institución se ha recibido solicitud de información y datos relacionados a las actividades desarrolladas por la empresa Evolution Market Group Inc., sociedad anónima de nacionalidad panameña y cuyo nombre comercial es Finanzas Forex.
Si bien es cierto, la actividad de Forex no es una actividad propia del mercado de valores, según se ha reiterado mediante Opinión administrativa 5-2004 de 5 de mayo de 2004, ratificada a través de Opinión administrativa No. 5-2007 de 27 de mayo de 2007, la CNV ejecuta el análisis de la información recibida como corresponde para determinar si hay actividades relacionadas con el mercado de valores y por tanto requieran algún tipo de licencia o autorización por parte de ésta, y/o con el objeto de determinar la posible violación al Decreto Ley No. 1 de 1999 y sus reglamentos por parte de la referida empresa.
Con respecto a un posible traslado de la referida investigación al Ministerio Público, se informa que la Comisión Nacional de Valores no ha encontrado a la fecha elementos para proceder a instaurar una denuncia al Ministerio Público por posibles infracciones en la esfera penal, no obstante de haberlo en un futuro correspondería remitirlo a las autoridades penales correspondientes en el ejercicio de nuestras funciones como funcionarios públicos.
There are some interesting parallels with FFX and Charles Ponzi’s scheme. The thing is, even with Ponzi, there were people making good money. The trick was to pull out in time. FFX has been around since January of 2007. By this time, they are hitting their third 6 month cycle. Ponzi was able to run his scheme for about 11 months, in the course of which he had amassed millions of dollars.
Here’s my conclusion:
The Foreign Exchange market is high risk, high gain. The raising and relaxing of interest rates has made the US dollar (and, consequently, many other currencies) fluctuate wildly. This allows smart brokers to make very good returns on their investments. Why these brokers would want to share their amazing secret with isn’t all too clear. They could be taking a Wal-Mart approach to business (Small profit margin is made up for by wide client base). So far, current FFX clients are very happy with their investments. If this is a Ponzi scheme, it may be coming to an end, and there might not be much more time until everything collapses. I’m willing to invest for six months, until I regain my original investment, and leave the rest as seed money (If I lose it, it’ll only be the interest I gained).
Nothing ventured, nothing gained. I hope I won’t be sorry. Updates coming soon.