The Nova Scotia Securities Commission (NSSC), one of the thirteen provincial financial regulators in Canada, has issued a warning alert for investors, adding the forex firm Stanford FX (www.stanfordfx.com) to its caution list.
This time, the firm under the spotlight of NSSC offers clients a range of financial services, which includes forex and cryptocurrencies, as well as unrealistic payouts associated with its affiliate programs, which compensate clients for attracting new traders.
The watchdog further explains that the Stanford FX website raises a number of red flags characteristic of investment scams. Among other things, Stanford FX falsely claims to be operating out of London, and registered by the Financial Conduct Authority. This is not true as a recent warning notice issued by the FCA confirms Stanford FX is not authorized by the City watchdog.
“The internet can be a dangerous place to shop for investments but can also assist in identifying scams. In additional to verifying registration, always take the time to search the entity and its representatives. A simple Google search often provides a wealth of information about an entity’s legitimacy or lack thereof including alerts and warnings, complaints, reviews, and other information to caution investors and assist in making informed investment decisions,” says Stephanie Atkinson, Director of Enforcement for the Commission. “Taking a few minutes to Google the entity and individual names may save you from irreversible financial loss.”
Getting back to the warning, the Nova Scotian watchdog said Stanford FX is not registered to trade in or advise on securities or exchange contracts in the province. Stanford FX was also flagged for cold calling Nova Scotia residents offering to establish trading accounts in a manner that bears the hallmarks of an overseas broker scam, the regulator notes.
A company’s registration status can be checked by using the Canadian Securities Administrators’ National Registration Search database at www.aretheyregistered.ca.
After briefly explaining certain risks related to derivatives products, the provincial authority noted that online advertising services are a dangerous place to shop for investments, and recommends exercising extreme caution when dealing with firms that are not registered in Nova Scotia.
The NSSC is the independent provincial government agency responsible for regulating securities trading in Nova Scotia through the administration of the Securities Act. The regulator website provides information, tools, and resources for investors, including warnings about individuals and brokers that appear to be engaging in unauthorized activities.
The chief regulatory body for the Forex market in Canada has recently proposed a regulatory framework that provides clarity for derivatives activities, including Forex and CFDs products. Among other things, all leveraged products offered to retail clients must be approved in advance by IIROC. Brokers must obtain prior approval for their leveraged products either when releasing new instruments or introducing any changes to the current offerings.