How can you determine if a broker is involved in fraudulent activities?
I mean figuring out it is scam?
- Reg check: Make sure the broker is legit and registered with the SEC or FINRA.
- Platform vibes: Look at their site. If it looks shady, might be a scam.
- No free lunch: Promises of high returns, no risk? Total red flag.
- Clear as day: Look for transparency in fees & trading terms. No clarity = bad news.
- Pressure cooker: If theyâre rushing you to invest, pump the brakes.
- Review reality check: Scope out online reviews, but remember, they can be faked.
- Trust that gut: If it feels off, it probably is. Always do your research!
The first and, I think, the most important thing to confirm is if theyâre regulated. I also used to think that brokers that offer bonuses are automatically shady, but Iâve seen people here talk about how thatâs not always the case.
Honestly it is not as easy as it seems, even regulated companies can mess with your funds easily
Shouldnât this be reported, as is the point of them being regulated?
only if theyâre brokers who have chosen to be âregulatedâ somewhere like Vanuatu or the Seychelles or St. Vincent, where there isnât any proper regulation and the customers arenât protected at all
this is why itâs SO important to use only brokers who are regulated by ASIC, FCA or CFTC, so that they canât mess with your funds easily
itâs not about being âregulatedâ, in other words - it matters where and by whom theyâre regulated
but as long as people think itâs a clever idea to be âgoing offshore to escape the CFTCâ (which was set up specifically to protect them!) the horror stories about scam brokers that fill all trading forums will continue for ever
the post linked to just below (and a few posts following it) explain the situation:-
it doesnât help customers to report things to fake regulators, and unfortunately the world is full of them - brokers choose by whom to be regulated; many of them arenât real brokers, and many arenât real regulators either ⌠itâs a great shame, but the reality is that all forex traders need to do, to avoid 99.9% of the disasters that so regularly happen, is to make sure that their account with a forex broker is an account thatâs regulated by FCA, ASIC or CFTC - these are proper regulators - itâs honestly not much more complicated than that
anyone who has ever actually worked in the industry will tell you exactly what Iâve said above, but meanwhile there are also countless people posting in trading forums (especially here and at FF) who will tell you that âregulators donât really protect youâ and that âi use an unregulated broker and theyâre fine, iâve never had a problem,â and that âeven regulated companies can mess with your fundsâ ⌠so the bottom line is that itâs like very many other things in life where thereâs conflicting information: we all just have to decide for ourselves whom we believe
This. Your mileage may vary, as they say.