CFTC Says Millennials Vulnerable to Scams - The Industry Spread

Michael Volpe

After spending a decade in finance, Michael Volpe has been a freelance investigative journalist since 2009. His work has been published locally in the Chicago Reader, Chicago Crusader, Chicago Heights Patch, and New City. Nationally, Volpe's work has appeared in a wide variety of publications including the Washington Examiner, the Daily Caller, Crime Magazine, the Southern Christian Leadership Conference Newsletter, and Counter Punch. Volpe has been recognized by whistleblowers as leading the charge in getting their stories out. His first book Prosecutors Gone Wild was published in October 2012, his second book The Definitive Dossier of PTSD in Whistleblowers was published in February 2013 and his third book Bullied to Death was published in August 2015.

CFTC

CFTC Says Millennials Vulnerable to Scams

September 16, 2018
James McDonald, CFTC’s Director of the Division of Enforcement
James McDonald, CFTC’s Director of the Division of Enforcement

The Commodities Futures Trading Commission’s (CFTC) head of enforcement noted that scammers are using some of the most popular technology to target millennials.

James McDonald is the CFTC’s Director of the Division of Enforcement and he stated, ““We have seen an increase in the number of unregistered entities and individuals illegally pedaling apps, websites, and social media to retail customers for trading in forex and binary options.  Many of these entities and individuals specifically target Millennials, who may be less experienced investors.”

McDonald made the statement as part of a press release announcing a dragnet, catching seven forex/binary options dealers who were offering forex and binary options trading for clients without registering with the CFTC.

Mr. McDonald further stated: “When customers deal with CFTC-registered entities, they can have confidence that certain required safeguards are in place to protect them from fraud and other abusive practices.  Customers can have no such confidence when dealing with unregistered entities.  That is one reason why the law requires individuals and entities offering products in our markets to register with the CFTC.  And that’s why the CFTC will vigorously pursue entities and individuals who fail to register with the CFTC when required and put in place the necessary safeguards needed to protect customers and preserve market integrity.”

The following companies and individuals were sued by the CFTC:

  • Allen Investment Management, LLC et al., an Indiana LLC and founder and officer Ryan Jacob Allen;
  • Forex Entourage LLC, a Utah LLC and its cofounders Paul Anthony Romero and Zachary Duffy;
  • HedgeFund4U, LLC, a California LLC and its chief executive officer Isaac Ticon;
  • Hooley Solutions LLC, a Utah LLC and its founder and owner Steven Bradley Hooley;
  • International Markets Live, Inc.; a New York corporation;
  • LegionFX LLC, a Nevada LLC;
  • The Lion’s Share FX,a Michigan company and co-founders Jordan Denham, Collin Hargis and Josh Pascoe; and
  • Wealth Generators, LLC, a Utah LLC.

While the CFTC has not previously specifically warned millennials (those born in the early 1980s and 1990s), the announcement that unregistered forex and binary options firms are operating is nothing new; indeed, the CFTC has issued repeated alerts about forex and binary options scams.

CantorBinary options can only be legally traded on regulated exchanges; NADEX and Cantor are two properly regulated exchanges which exclusively trade binary options, while the CME and others offer binary options among a basket of products.

The most recent alert on forex scams includes these red flags:

  • Promises that with Forex, there is no “bear” market
  • Firms that claim you can or should trade in the interbank market
  • Requests to send or transfer cash quickly via the Internet, by mail, or otherwise
  • Difficulty getting background information about the person and/or company

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