(PHILIPPINE BASED PERFORMANCE FOREIGN EXCHANGE CORPORATION IN REVIEW)
Speaking of on-line forex brokers, who can be called “fakes” or “scammers” , and who are not?
A business registration in the country where it holds office surely is not enough basis for anyone to conclude that a company is operating above board, or is not engaged with anything illegal. Having several accounts with prestigious and known banks is also not a guarantee of one’s business propriety. We’ve seen this happen over and over again in the past. We’ve seen how PIPC, a duly registered entity established in the like manner by the same person (Michael Liew), and operates in the same way as the “now-still-existing” Performance Foreign Exchange Corporation, ( the subject of my critical blog review today) duped Filipino investors.
Many people would want to invest in the foreign exchange market anonymously for various reasons of their own. They are those who’d prefer to open accounts incognito (known only to the servicing company they deal with). There are also those who invest through the “hard sell” tactics of some forex brokers who utilize the services of marketing representatives with well- heeled family and social connections. More often than not, in their haste to establish foreign currency trading accounts, and in their effort to keep their identities concealed, they forget about doing a due diligence on the company at the onset ( a must-do prerequisite for all prospective investors).
Who then can we call fake forex brokers?
Trust, more than anything else, is the most important, yet the most abused word in all business transactions (specially so with on line investing). It is imperative that trust and confidence is present in any transaction between the investor and his broker. And, in online foreign currency trading, it is imperative for the forex broker to go out of his way to prove the legitimacy of his business through the published pages of his web site. ( I have always maintained that the burden of proof always lie in the hands of the soliciting broker.) To gain the trust and confidence of its prospective investors, an on line broker must therefore make a full disclosure of all the relevant facts pertaining to their company and the conduct thereof. All these must be clearly stipulated and can be easily found in their websites. Pertinent data such as bank references, accreditations and affiliations with respectable and acceptable financial institutions must be published prominently in their web sites. Failure to do so, to me, is intentional concealment of pertinent facts needed by a prospective investor to make a fair and square assessment of the company. In my opinion, non publication of these pertinent data on a website is equivalent to misleading the public and is no different from the malpractice of providing false information to their clients.
If a broker deals directly with a bank (meaning if it courses all its forex transactions directly to a bank), then the broker must publish verifiable information about his account (and about the bank as well) in his website. (For all you know, the particular bank may not even have a foreign currency trading window, or, the account opened is not a trading account but merely a standard depository account.) Should issues of confidentiality be raised, the least that the broker must do is to publish a statement in the web site stipulating that such documents are available on request. Given this, prospective investors will have the chance to fairly decide whether to take the risk or not with the broker.
Brokers, by definition are intermediaries. They act as agents of certain financial institutions such as banks, currency exchanges, large financial investment houses. Also, they often are required to submit to the jurisdiction and supervision of regulatory agencies in such established countries where they operate like in the U.S., Australia, Great Britain, Germany, Singapore, Malaysia, and Hongkong. Legitimate on line brokers must surely have at least one such verifiable affiliation, membership, or accreditation. Those without should be suspects and immediately discarded from your list. Those who make false claims can now be more easily exposed and avoided.
IN FOCUS:PERFORMANCE FOREIGN EXCHANGE CORPORATION-A critical review of the website http://www.eforex-asia.com/
If I were to invest money on online foreign currency trading and PFEC happens to be one of the many brokers I am considering, this is how I shall assess their website http://www.eforex-asia.com/:
- Has an attractive, professional looking web-site (makes you stay longer and do a deeper snooping of the site)
- Offers practically all the necessary tools and services an investor needs to be able to manage his own account.
- easy to navigate website with a fast download link to its user friendly trading platform interface
- misleading claim #1: “PERFORMANCE FOREIGN EXCHANGE CORPORATION (PFEC) was registered with the SEC on 23 June, 1998 primarily to operate as an agent between market participants in transactions involving but not limited to foreign exchange, deposit,..” Due diligence would easily ferret out the truth that this company is registered as an information, service and facilities provider only and not as a broker.(I still don’t know how they got away from with these with the SEC when the website clearly states they are engaged in brokering services (a business activity requiring a different licensing requirement)
- misleading claim #2:Testimonials“The following are testimonials of clients of Performance Foreign Exchange Corporation or any of its country affiliates/subsidiaries. As a rule these testimonials are unsolicited gratis from people we do business with.” Easily, one will sense a deliberate ploy to mislead readers here with the inclusion of its “affiliates and subsidiaries. The testimonials may be from other sources and not theirs but the inclusion of such rejoinder is a ploy to be able to publish favorable testimonials from other sources and make it appear as their own.
- misleading claim #3: PFEC has claimed affiliation with this company “SolidGold Financial Services, Inc. (U.S.A.) , Registerered: Futures Commision Merchant, Commodity Trading Pool Operator, Commodity Trading Advisor.” The claim is false! No record of this company exists with the CFTC or with NFA. Anyone can easily get this information from the websites of both agencies.
I still have much more to discuss, but again because of limited space, I need to end this blog for now. Besides, if I were the investor, what I have so far discussed is enough for me to decide not to deal with a company that deliberately mislead its prospective clients and make false claims about its accreditation.
(This is my opinion. What is yours? Please feel free to post your comment below.)